Swine influenza monitoring programs have been in place in Italy since the 1990 s and from 2009 testing for the pandemic H1N1/2009 virus (H1N1pdm) was also performed on all the swine samples positive for type A influenza. This paper reports the isolation and genomic characterization of a novel H1N2 swine influenza reassortant strain from pigs in Italy that was derived from the H1N1pdm virus. In May 2010, mild respiratory symptoms were observed in around 10% of the pigs raised on a fattening farm in Italy. Lung homogenate taken from one pig showing respiratory distress was tested for influenza type A and H1N1pdm by two real time RT-PCR assays. Virus isolation was achieved by inoculation of lung homogenate into specific pathogen free chicken embryonated eggs (SPF CEE) and applied onto Caco-2 cells and then the complete genome sequencing and phylogenetic analysis was performed from the CEE isolate. The lung homogenate proved to be positive for both influenza type A (gene M) and H1N1pdm real time RT-PCRs. Virus isolation (A/Sw/It/116114/2010) was obtained from both SPF CEE and Caco-2 cells. Phylogenetic analysis showed that all of the genes of A/Sw/It/116114/2010, with the exception of neuraminidase (NA), belonged to the H1N1pdm cluster. The NA was closely related to two H1N2 double reassortant swine influenza viruses (SIVs), previously isolated in Sweden and Italy. NA sequences for these three strains were clustering with H3N2 SIVs. The emergence of a novel reassortant H1N2 strain derived from H1N1pdm in swine in Italy raises further concerns about whether these viruses will become established in pigs. The new reassortant not only represents a pandemic (zoonotic) threat but also has unknown livestock implications for the European swine industry.