Shiga toxin-producing Escherichia coli (STEC) O157:H7 is a public health threat and outbreaks occur worldwide. Here, we investigate genomic differences between related STEC O157:H7 that caused two outbreaks, eight weeks apart, at the same restaurant. Short-read genome sequencing divided the outbreak strains into two sub-clusters separated by only three single-nucleotide polymorphisms in the core genome while traditional typing identified them as separate phage types, PT8 and PT54. Isolates did not cluster with local strains but with those associated with foreign travel to the Middle East/North Africa. Combined long-read sequencing approaches and optical mapping revealed that the two outbreak strains had undergone significant microevolution in the accessory genome with prophage gain, loss and recombination. In addition, the PT54 sub-type had acquired a 240 kbp multi-drug resistance (MDR) IncHI2 plasmid responsible for the phage type switch. A PT54 isolate had a general fitness advantage over a PT8 isolate in rich medium, including an increased capacity to use specific amino acids and dipeptides as a nitrogen source. The second outbreak was considerably larger and there were multiple secondary cases indicative of effective human-to-human transmission. We speculate that MDR plasmid acquisition and prophage changes have adapted the PT54 strain for human infection and transmission. Our study shows the added insights provided by combining whole-genome sequencing approaches for outbreak investigations.