Contagious ecthyma in small ruminants is a zoonotic disease caused by Orf virus (ORFV) in the genus Parapoxvirus that can be deadly to its natural hosts. It causes significant losses worldwide, and commonly infects humans. However, the literature about its comparative severity in sheep and goat hosts is misleading; and while contagious ecthyma has been shown to occur in camels and transmit to humans, there is confusion as to whether ORFV is responsible. Camels are important from a 'One Health' perspective as they have been implicated as a reservoir host for the virus causing Middle East Respiratory Syndrome (MERS), which has a case fatality rate of 35% in humans. We compared ORFV gene sequences and mortality data from the West Bank in Palestine, where ORFV has not been reported previously, with data from the region. Surprisingly, we found that infections of camels that had been attributed to ORFV were more closely related to a different member of the genus Parapoxvirus. Two Middle East ORFVs isolated from humans were unrelated and sat alongside sheep and goat derived sequences on two distinct ORFV lineages of a maximum likelihood B2L gene tree. One of the viral lineages bifurcated to produce a monophyletic group of goat-derived ORFVs characterized uniquely by a glycine at amino acid reside 249. We found that serine is the ancestral allele shared between ORFV infections of sheep and also two closely related Parapoxviruses (PCPV and CCEV), indicating that the glycine allele represents a more recent shift in virus host range adaptation to goats. Furthermore, and contrary to some reports that ORFV is more severe in goats than in sheep, we observed median mortality of up to 24.5% in sheep, but none in goats. We also identified trans-boundary spread of ORFV between the West Bank and Israel.