Spillover diseases have significant consequences for human and animal health, as well as wildlife conservation. We examined spillover and transmission of the pneumonia-associated bacterium Mycoplasma ovipneumoniae in domestic sheep, domestic goats, bighorn sheep, and mountain goats across the western United States using 594 isolates, collected from 1984 to 2017. Our results indicate high genetic diversity of M. ovipneumoniae strains within domestic sheep, whereas only one or a few strains tend to circulate in most populations of bighorn sheep or mountain goats. These data suggest domestic sheep are a reservoir, while the few spillovers to bighorn sheep and mountain goats can persist for extended periods. Domestic goat strains form a distinct clade from those in domestic sheep, and strains from both clades are found in bighorn sheep. The genetic structure of domestic sheep strains could not be explained by geography, whereas some strains are spatially clustered and shared among proximate bighorn sheep populations, supporting pathogen establishment and spread following spillover. These data suggest that the ability to predict M. ovipneumoniae spillover into wildlife populations may remain a challenge given the high strain diversity in domestic sheep and need for more comprehensive pathogen surveillance.