To investigate the prevalence of influenza viruses in feral water birds in the Southern Hemisphere, fecal samples of terns were collected on Heron Island, Australia, in December 2004. Six H2N5 influenza viruses were isolated. This is the first report of the isolation of the H2 subtype from shore birds in Australia. Phylogenetic analysis revealed that the M gene belonged to the American lineage of avian influenza viruses and the other genes belonged to the Eurasian lineages, indicating that genetic reassortment occurs between viruses of Eurasian and American lineages in free flying birds in nature.