In cystic fibrosis (CF), Pseudomonas aeruginosa undergoes intra-strain genotypic and phenotypic diversification while establishing and maintaining chronic lung infections. As the clinical significance of these changes is uncertain, we investigated intra-strain diversity in commonly shared strains fromCF patients to determine if specific gene mutations were associated with increased antibiotic resistance and worse clinical outcomes. Two-hundred-and-one P. aeruginosa isolates (163 represented a dominant Australian shared strain, AUST-02) from two Queensland CF centres over two distinct time-periods (2001–2002 and 2007–2009) underwent mexZ and lasR sequencing. Broth microdilution antibiotic susceptibility testing in a subset of isolates was also performed. We identified a novel AUST-02 subtype (M3L7) in adults attending a single Queensland CF centre. This M3L7 subtype was multi-drug resistant and had significantly higher antibiotic minimum inhibitory concentrations than other AUST-02 subtypes. Prospective molecular surveillance using polymerase chain reaction assays determined the prevalence of the ‘M3L7’ subtype at this centre during 2007–2009 (170 patients) and 2011 (173 patients). Three-year clinical outcomes of patients harbouring different strains and subtypes were compared. MexZ and LasR sequences from AUST-02 isolates were more likely in 2007–2009 than 2001–2002 to exhibit mutations (mexZ: odds ratio (OR) = 3.8; 95% confidence interval (CI): 1.1–13.5 and LasR: OR = 2.5; 95%CI: 1.3–5.0). Surveillance at the adult centre in 2007–2009 identified M3L7 in 28/509 (5.5%) P. aeruginosa isolates from 13/ 170 (7.6%) patients. A repeat survey in 2011 identifiedM3L7 in 21/519 (4.0%) P. aeruginosa isolates from 11/173 (6.4%) patients. The M3L7 subtype was associated with greater intravenous antibiotic and hospitalisation requirements, and a higher 3-year risk of death/lung transplantation, than other AUST-02 subtypes (adjusted hazard ratio [HR] = 9.4; 95%CI: 2.2– 39.2) and non-AUST-02 strains (adjusted HR = 4.8; 95%CI: 1.4–16.2). This suggests ongoing microevolution of the shared CF strain, AUST-02, was associated with an emergingmultidrug resistant subtype and possibly poorer clinical outcomes.