Omicron BA.2.86 subvariant differs from Omicron BA.2 as well as recently circulating variants by over 30 mutations in the spike protein alone. Here we report on the isolation of the live BA.2.86 subvariant from a diagnostic swab collected in South Africa which we tested for escape from neutralizing antibodies and viral replication properties in cell culture. We found that BA.2.86 does not have significantly more escape relative to Omicron XBB.1.5 from neutralizing immunity elicited by either Omicron XBB-family subvariant infection or from residual neutralizing immunity of recently collected sera from the South African population. BA.2.86 does have extensive escape relative to ancestral virus with the D614G substitution (B.1 lineage) when neutralized by sera from pre-Omicron vaccinated individuals and relative to Omicron BA.1 when neutralized by sera from Omicron BA.1 infected individuals. BA.2.86 and XBB.1.5 show similar viral infection dynamics in the VeroE6-TMPRSS2 and H1299-ACE2 cell lines. We also investigate the relationship of BA.2.86 to BA.2 sequences. The closest BA.2 sequences are BA.2 samples from Southern Africa circulating in early 2022. Similarly, many basal BA.2.86 sequences were sampled in Southern Africa. This suggests that BA.2.86 potentially evolved in this region, and that unobserved evolution led to escape from neutralizing antibodies similar in scale to recently circulating strains of SARS-CoV-2.