The chronic infection hypothesis for novel severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) variant emergence is increasingly gaining credence following the appearance of Omicron. Here, we investigate intrahost evolution and genetic diversity of lineage B.1.517 during a SARS-CoV-2 chronic infection lasting for 471 days (and still ongoing) with consistently recovered infectious virus and high viral genome copies. During the infection, we find an accelerated virus evolutionary rate translating to 35 nucleotide substitutions per year, approximately 2-fold higher than the global SARS-CoV-2 evolutionary rate. This intrahost evolution results in the emergence and persistence of at least three genetically distinct genotypes, suggesting the establishment of spatially structured viral populations continually reseeding different genotypes into the nasopharynx. Finally, we track the temporal dynamics of genetic diversity to identify advantageous mutations and highlight hallmark changes for chronic infection. Our findings demonstrate that untreated chronic infections accelerate SARS-CoV-2 evolution, providing an opportunity for the emergence of genetically divergent variants.