A recent epidemic of Bean pod mottle virus (BPMV), transmitted primarily by the bean leaf beetle, Cerotoma trifurcata (Förster), has caused economic losses in Midwestern soybean growing regions. Previous research indicates that the bipartite virus BPMV contains two taxonomic subgroups for both RNA–1 and RNA–2 that can form naturally reassortant strains—two of which are partial diploids, i.e. they contain RNA–1 from both subgroup I and II. Furthermore, the diploid nature of these two reassortants is the underlying mechanism for very severe symptoms. We have discovered a novel naturally occurring BPMV reassortant from Desmodium illinoense Gray (designated I-Di1) belonging to subgroup I for RNA–1 and subgroup II for RNA–2. Based on symptomology tests, this new reassortant caused moderate symptoms on three representative soybean varieties (Clark, Essex, and William’s). Extensive reverse-transcription PCR and sequencing confirmed the existence of only one type of RNA–1 from I-Di1. Furthermore, BPMV isolates were collected from a soybean field adjacent to the type locality of I-Di1. Based on molecular characterization and phylogenetic analysis the soybean isolates are different than I-Di1. Additionally there is a surprising amount of genetic diversity among these soybean isolates considering they were collected along a 720-m transect from the same soybean field. Our results indicate the co-existence of two BPMV subgroups in adjacent habitats, thus revealing some genetic diversity within the landscape that may be important for BPMV disease epidemics. The implications of these results concerning the horizontal transmission of BPMV by insect vectors are discussed.