The ongoing human H7N9 influenza infections highlight the threat of emerging avian influenza viruses. In 2011, an avian H3N8 influenza virus isolated from moribund New England harbour seals was shown to have naturally acquired mutations known to increase the transmissibility of highly pathogenic H5N1 influenza viruses. To elucidate the potential human health threat, here we evaluate a panel of avian H3N8 viruses and find that the harbour seal virus displays increased affinity for mammalian receptors, transmits via respiratory droplets in ferrets and replicates in human lung cells. Analysis of a panel of human sera for H3N8 neutralizing antibodies suggests that there is no population-wide immunity to these viruses. The prevalence of H3N8 viruses in birds and multiple mammalian species including recent isolations from pigs and evidence that it was a past human pandemic virus make the need for surveillance and risk analysis of these viruses of public health importance.