Bacterial lineages that chronically infect cystic fibrosis (CF) patients genetically diversify during infection. However, the mechanisms driving diversification are unknown. By dissecting ten CF lung pairs and studying ∼12,000 regional isolates, we were able to investigate whether clonally related Pseudomonas aeruginosa inhabiting different lung regions evolve independently and differ functionally. Phylogenetic analysis of genome sequences showed that regional isolation of P. aeruginosa drives divergent evolution. We investigated the consequences of regional evolution by studying isolates from mildly and severely diseased lung regions and found evolved differences in bacterial nutritional requirements, host defense and antibiotic resistance, and virulence due to hyperactivity of the type 3 secretion system. These findings suggest that bacterial intermixing is limited in CF lungs and that regional selective pressures may markedly differ. The findings also may explain how specialized bacterial variants arise during infection and raise the possibility that pathogen diversification occurs in other chronic infections characterized by spatially heterogeneous conditions. Display omitted •Lungs from cystic fibrosis patients were dissected to obtain regional P. aeruginosa•Clonally related P. aeruginosa from different lung regions differed phenotypically•Phylogenetics shows regional bacteria evolve in isolation and mixing is limited•Isolation drives divergent evolution of P. aeruginosa in cystic fibrosis infections P. aeruginosa genetically diversifies during cystic fibrosis infections. However, the mechanisms producing diversification are unknown. Jorth et al. demonstrate that clonally related P. aeruginosa inhabiting different lung regions differ phenotypically and evolve divergently. Thus, isolation in different organ regions can contribute to pathogen genetic diversification within a human host.