Background: Deer tick virus, DTV, is a genetically and ecologically distinct lineage of Powassan virus (POWV) also known as lineage II POWV. Human incidence of POW encephalitis has increased in the last 15 years potentially due to the emergence of DTV, particularly in the Hudson Valley of New York State. We initiated an extensive sampling campaign to determine whether POWV was extant throughout the Hudson Valley in tick vectors and/or vertebrate hosts. Methods: More than 13,000 ticks were collected from hosts or vegetation and tested for the presence of DTV using molecular and virus isolation techniques. Vertebrate hosts of Ixodes scapularis (black-legged tick) were trapped (mammals) or netted (birds) and blood samples analyzed for the presence of neutralizing antibodies to POWV. Maximum likelihood estimates (MLE) were calculated to determine infection rates in ticks at each study site. Results: Evidence of DTV was identified each year from 2007 to 2012, in nymphal and adult I. scapularis collected from the Hudson Valley. 58 tick pools were positive for virus and/or RNA. Infection rates were higher in adult ticks collected from areas east of the Hudson River. MLE limits ranged from 0.2-6.0 infected adults per 100 at sites where DTV was detected. Virginia opossums, striped skunks and raccoons were the source of infected nymphal ticks collected as replete larvae. Serologic evidence of POWV infection was detected in woodchucks (4/6), an opossum (1/6), and birds (4/727). Lineage I, prototype POWV, was not detected. Conclusions: These data demonstrate widespread enzootic transmission of DTV throughout the Hudson Valley, in particular areas east of the river. High infection rates were detected in counties where recent POW encephalitis cases have been identified, supporting the hypothesis that lineage II POWV, DTV, is responsible for these human infections.