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In February 2020, the municipality of Vo’, a small town near Padua (Italy) was quarantined due to the first coronavirus disease 19 (COVID-19)-related death detected in Italy. To investigate the viral prevalence and clinical features, the entire population was swab tested in two sequential surveys. Here we report the analysis of 87 viral genomes, which revealed that the unique ancestor haplotype introduced in Vo’ belongs to lineage B, carrying the mutations G11083T and G26144T. The viral sequences allowed us to investigate the viral evolution while being transmitted within and across households and the effectiveness of the non-pharmaceutical interventions implemented in Vo’. We report, for the first time, evidence that novel viral haplotypes can naturally arise intra-host within an interval as short as two weeks, in approximately 30% of the infected individuals, regardless of symptom severity or immune system deficiencies. Moreover, both phylogenetic and minimum spanning network analyses converge on the hypothesis that the viral sequences evolved from a unique common ancestor haplotype that was carried by an index case. The lockdown extinguished both the viral spread and the emergence of new variants.