Listeria monocytogenes is a foodborne pathogen of humans and animals. The majority of human listeriosis cases are caused by strains of lineages I and II, while lineage III strains are rare and seldom implicated in human listeriosis. We revealed by 16S rRNA sequencing the special evolutionary status of L. monocytogenes lineage III, which falls between lineages I and II strains of L. monocytogenes and the non-pathogenic species L. innocua and L. marthii in the dendrogram. Thirteen lineage III strains were then characterized by polyphasic approaches. Biochemical reactions demonstrated 8 biotypes, internalin profiling identified 10 internalin types clustered in 4 groups, and multilocus sequence typing differentiated 12 sequence types. These typing schemes show that lineage III strains represent the most diverse population of L. monocytogenes, and comprise at least four subpopulations IIIA-1, IIIA-2, IIIB, and IIIC. The in vitro and in vivo virulence assessments showed that two lineage IIIA-2 strains had reduced pathogenicity, while the other lineage III strains had comparable virulence to lineages I and II. The IIIB strains are phylogenetically distinct from other subpopulations, providing additional evidence that this sublineage represents a novel lineage. The two biochemical reactions L-rhamnose and L-lactate alkalinization, and 10 internalins were identified as potential markers for lineage III subpopulations. This study provides new insights into the biodiversity and population structure of lineage III strains, which are important for understanding the evolution of the L. monocytogenes-L. innocua clade.