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In the United States, rural populations comprise 60 million individuals and suffer from high COVID-19 disease burdens. Despite this, surveillance efforts are biased toward urban centers. Consequently, how rurally circulating SARS-CoV-2 viruses contribute toward emerging variants remains unknown. In this study, 544 urban and 435 rural COVID-19-positive respiratory specimens were collected from two healthcare systems in Missouri between July and December 2020, prior to COVID-19 vaccines. We saw high genetic diversity with 14 of 53 SARS-CoV-2 Pango lineages detected only in rural samples. The lineage diversity of SARS-CoV-2 in rural communities gradually increased whereas those in urban areas remained similar during the study period. Phylodynamic analyses revealed frequent bi-directional diffusions between rural and urban communities and seven lineages first detected in rural, four of which consequently spread globally. The nucleocapsid protein (N):R203K/G204R paired substitutions, which were parallelly detected across multiple Pango lineages, were under positive selection and more associated with urban than rural sequences. This study demonstrates that rural communities are a crucial source of SARS-CoV-2 evolution and transmission, highlighting the need to expand surveillance and resources to rural populations for COVID-19 mitigation.