Cases of SARS-CoV-2 infection in Manaus, Brazil, resurged in late 2020, despite high levels of previous infection there. Through genome sequencing of viruses sampled in Manaus between November 2020 and January 2021, we identified the emergence and circulation of a novel SARS-CoV-2 variant of concern, lineage P.1, that acquired 17 mutations, including a trio in the spike protein (K417T, E484K and N501Y) associated with increased binding to the human ACE2 receptor. Molecular clock analysis shows that P.1 emergence occurred around early November 2020 and was preceded by a period of faster molecular evolution. Using a two-category dynamical model that integrates genomic and mortality data, we estimate that P.1 may be 1.4-2.2 times more transmissible and 25-61% more likely to evade protective immunity elicited by previous infection with non-P.1 lineages. Enhanced global genomic surveillance of variants of concern, which may exhibit increased transmissibility and/or immune evasion, is critical to accelerate pandemic responsiveness. One-Sentence Summary: We report the evolution and emergence of a SARS-CoV-2 lineage of concern associated with rapid transmission in Manaus.