Continued uncontrolled transmission of the severe acute respiratory syndrome-related coronavirus 2 (SARS-CoV-2) in many parts of the world is creating the conditions for significant virus evolution. Here, we describe a new SARS-CoV-2 lineage (501Y.V2) characterised by eight lineage-defining mutations in the spike protein, including three at important residues in the receptor-binding domain (K417N, E484K and N501Y) that may have functional significance. This lineage emerged in South Africa after the first epidemic wave in a severely affected metropolitan area, Nelson Mandela Bay, located on the coast of the Eastern Cape Province. This lineage spread rapidly, becoming within weeks the dominant lineage in the Eastern Cape and Western Cape Provinces. Whilst the full significance of the mutations is yet to be determined, the genomic data, showing the rapid displacement of other lineages, suggest that this lineage may be associated with increased transmissibility.