Background More than a year after its first appearance in December 2019, the COVID-19 pandemic is still on a rampage in many parts of the world. Although several vaccines have been approved for emergency use, the emergence and rapid spread of new SARS-CoV-2 variants have sparked fears of vaccine failure due to immune evasion. Massive viral genome sequencing has been recommended to track the genetic changes that could lead to adverse consequences. Methods We sequenced SARS-CoV-2 respiratory isolates from the National Public Health Laboratory, Malaysia and examined them together with viral genomes deposited in GISAID by other Malaysian researchers, to understand the evolutionary trend of the virus circulating in the country. We studied the distribution of virus lineages and site-wise mutations, analysed genetic clustering with the goeBURST full Minimum Spanning Tree algorithm, examined the trend of viral nucleotide diversity over time and performed nucleotide substitution association analyses. Results We identified 22 sub-lineages, 13 clonal complexes, 178 sequence types and seven sites of linkage disequilibrium in 277 SARS-CoV-2 genomes sequenced between January and December 2020. B.1.524 was the largest lineage group. The number of mutations per genome ranged from 0 to 19. The mean genomic diversity value over 12 months was 3.26 × 10−4. Of 359 mutations detected, 60.5% of which were non-synonymous, the most frequent were in the ORF1ab (P4715L), S (D614G and A701V) and N (S194L) genes. Conclusion The SARS-CoV-2 virus accumulated an abundance of mutations in the first year of the COVID-19 pandemic in Malaysia. Its overall genetic diversity, however, is relatively low compared to other Asian countries with larger populations. Continuous genomic and epidemiological surveillance will help to clarify the evolutionary processes determining viral diversity and impacting on human health.