In late 2018, an epidemic myxomatosis outbreak emerged on the Iberian Peninsula leading to high mortality in Iberian hare populations. Soon, a recombinant virus (MYXV-Tol or ha-MYXV) was identified, harboring a 2.8 kb insertion containing evolved duplicates of M060L, M061L, M064L, and M065L from MYXV. Since 2017, 1616 rabbits and 82 hares were tested by a qPCR directed to M000.5L/R gene, conserved in MYXV and MYXV-Tol/ ha-MYXV strains. A subset (20%) of the positive samples was tested for the insert with MYXV being detected in rabbits and recombinant MYXV in hares. Recently, two wild rabbits found dead in South Portugal, showing skin oedema and pulmonary lesions tested positive for the 2.8 Kb insert. Sequencing showed 100% similarity with the insert sequences described in Iberian hares from Spain. Viral particles were observed in the lungs of both rabbits by electron microscopy, and isolation in RK13 cells showed virus infectivity. Despite the analysis of recombinant MYXV genomes may predict its ability to infect rabbit, routine analyses showed species segregation for the circulation of MYXV and recombinant MYXV in wild rabbit and in Iberian hares, respectively. This study demonstrates, however, that recombinant MYXV can effectively infect and cause myxomatosis in wild rabbits and domestic rabbits, which raises serious concerns for the future of the Iberian wild leporids and emphasizes the need to continue monitoring MYXV and recombinant MYXV in both species.