Papaya ringspot virus (PRSV) severely affects the global papaya industry. Transgenic papaya has been proven to have effective resistance to PRSV isolates from Hawaii, Thailand, Taiwan, and other countries. However, those transgenic cultivars failed to show resistance to Hainan Island isolates. Some 76 PRSV samples, representative of all traditional papaya planting areas across five cities (Wen Chang, n = 13; Cheng Mai, n = 14; Chang Jiang, n = 11; Le Dong, n = 25; and San Ya, n = 13) within Hainan Province, were investigated. Results revealed three genetic diversity groups (Hainan I, II, and III) that correlated with geographical distribution. Frequent mutations among PRSV isolates from Hainan were also observed. The high genetic divergence in PRSV isolates from Hainan is likely to be the cause of the failure of genetically modified papaya that targets sequence-specific virus.