The embryonated chicken egg (ECE) is routinely used for the laboratory isolation and adaptation of Bluetongue virus (BTV) in vitro. However, its utility as an alternate animal model has not been fully explored. In this paper, we evaluated the pathogenesis of BTV in ovo using a pathogenic isolate of South African BTV serotype 3 (BTV-3) derived from the blood of an infected sheep. Endothelio- and neurotropism of BTV-3 were observed by immunohistochemistry of non-structural protein 1 (NS1), NS3, NS3/3a, and viral protein 7 (VP7) antigens. In comparing the pathogenicity of BTV from infectious sheep blood with cell-culture-passaged BTV, including virus propagated through a Culicoides-derived cell line (KC) or ECE, we found virus attenuation in ECE following cell-culture passage. Genomic analysis of the consensus sequences of segments (Seg)-2, -5, -6, -7, -8, -9, and -10 identified several nucleotide and amino-acid mutations among the cell-culture-propagated BTV-3. Deep sequencing analysis revealed changes in BTV-3 genetic diversity in various genome segments, notably a reduction of Seg-7 diversity following passage in cell culture. Using this novel approach to investigate BTV pathogenicity in ovo, our findings support the notion that pathogenic BTV becomes attenuated in cell culture and that this change is associated with virus quasispecies evolution.