Highly pathogenic (HP) avian influenza viruses (AIV) evolve from low pathogenic (LP) precursors after circulation in poultry by reassortment and/or single mutations in different gene segments including that encoding NS1. The carboxyl terminal end (CTE) of NS1 exhibits deletions between amino acid 202 and 230 with still unknown impact on virulence of AIV in chickens. In this study, NS1 protein sequences of all AIV subtypes in birds from 1902 to 2015 were analyzed to study the prevalence and distribution of CTE truncation (ΔCTE). Thirteen different ΔCTE forms were observed in NS1 proteins from 11 HA and 8 NA subtypes with high prevalences in H9, H7, H6 and H10 and N9, N2, N6 and N1 subtypes particularly in chickens and minor poultry species. With 88% NS217 lacking amino acids 218-230 was the most common ΔCTE form followed by NS224 (3.6%). NS217 was found in 10 and 8 different HA and NA subtypes, respectively, whereas NS224 was detected exclusively in the Italian HPAIV H7N1 suggesting relevance for virulence. To test this assumption, 3 recombinant HPAIV H7N1 were constructed carrying wild-type HP NS1 (Hp-NS224), NS1 with extended CTE (Hp-NS230) or NS1 from LPAIV H7N1 (Hp-NSLp), and tested in-vitro and in-vivo. Extension of CTE in Hp NS1 significantly decreased virus replication in chicken embryo kidney cells. Truncation in the NS1 decreased the tropism of Hp-NS224 to the endothelium, central nervous system and respiratory tract epithelium without significant difference in virulence in chickens. This study described the variable forms of ΔCTE in NS1 and indicated that CTE is not an essential virulence determinant particularly for the Italian HPAIV H7N1 but may be a host-adaptation marker required for efficient virus replication.