Both dengue fever and its more serious clinical manifestation, dengue hemorrhagic fever, represent major public health concerns in the Americas. To understand the patterns and dynamics of virus transmission in Mexico, a country characterized by a marked increase in dengue incidence in recent years, we undertook a molecular evolutionary analysis of the largest sample of Mexican strains of dengue virus compiled to date. Our E gene data set comprises sequences sampled over a period of 27 years and representing all of the Mexican states that are endemic for dengue. Our phylogenetic analysis reveals that, for each of the four dengue viruses (DENV-1 to DENV-4), there have been multiple introductions of viral lineages in Mexico, with viruses similar to those observed throughout the Americas, but there has been strikingly little co-circulation. Rather, dengue virus evolution in Mexico is typified by frequent lineage replacement, such that only a single viral lineage dominates in a specific serotype at a specific time point. Most lineage replacement events involve members of the same viral genotype, although a replacement event involving different genotypes was observed with DENV-2, and viral lineages that are new to Mexico are described for DENV-1, DENV-3 and DENV-4.