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Influenza A virus (IAV) continues to pose an enormous threat to animal and public health owing to the emergence of novel strains with panzootic and pandemic potential. Effective control of emerging IAVs requires new broadly protective vaccines. It is now widely accepted that IAV populations exist as quasispecies (mutant spectra) mainly due to the high rates of spontaneous mutations spawned by their error-prone RNA-dependent RNA-polymerase complex. The IAV quasispecies is an extremely diverse swarm of biologically and genetically heterogeneous particle subpopulations that collectively influence the evolutionary fitness of the virus. Live attenuated influenza vaccines with truncations in nonstructural protein 1 (NS1) have shown broad protective efficacies in birds and mammals, which correlate with the ability to induce elevated interferon-related innate immune responses in the vaccinated hosts. These abilities appear to coincide with the presence of heterogenous population of interferon-inducing and defective-interfering particles in the vaccines. It is therefore of great importance to understand the factors that shape the heterogeneity of IAV populations to facilitate the development of broadly effective preventive and therapeutic measures against emerging IAV strains. In the first part of this study, we asked as to whether we could exploit the extreme diversity of influenza virus populations to improve an NS1-truncated live attenuated influenza vaccine developed for poultry (PC4) by selecting viral subpopulations with enhanced interferon-inducing capacities. We deconstructed a de novo population of PC4 through plaque isolation, created a large library of clones, and assessed their interferon-inducing phenotypes. While most of the clones displayed the parental interferon-inducing phenotype in cell culture, few clones showed enhanced interferon-inducing phenotypes in cell culture and chickens. Through deep sequencing of the whole IAV genome, we showed the enhanced interferon-inducing phenotypes were linked to either a deletion in NS1 (NS1Δ76-86) or a substitution in polymerase basic 2 protein (PB2-D309N). The NS1Δ76-86 deletion disrupted the putative eukaryotic translation initiation factor 4GI-binding domain and promoted the synthesis of biologically active interferons. The PB2-D309N substitution enhanced the early transcription of interferon mRNA, revealing a novel role for the 309D residue in suppression of interferon responses. We combined these mutations to engineer a novel vaccine candidate that induced additive amounts of interferons and stimulated protective immunity in chickens. In addition to the single nucleotide changes observed within the whole genomes, IAV populations are known to contain large population of defective-interfering particles with internally deleted viral genomes. Owing to their potential roles in suppression of infectivity and enhancement of innate immunity, the defective viral genomes have attracted attention as therapeutic and immunogenic agents in recent years. Therefore, in the second part of this study, we investigated the diversity and complexity of the defective viral genomes observed within deep sequences obtained from the PC4 virus along with a panel of PC4-derived clones with parental or enhanced interferon-inducing phenotypes. We first showed that physical separation of viral subpopulations through plaque purification can reduce the abundance of internally deleted viral genomes within an IAV population. Further, we demonstrated a higher tendency for generation of internally deleted genomes with distinct junctions in high interferon-inducing clones possessing the NS1Δ76-86 mutation compared to the parental clones. Finally, we uncovered an extremely diverse population of in silico-predicted polypeptides encoded by the internally deleted IAV genomes that might be involved in modulation of cellular processes and immunity in the infected cells. Future investigations are needed to better understand the mechanisms governing higher diversity of internal deletions within the genome of high interferon-inducing clones and their potential in enhancement of innate and adaptive immune responses in the vaccinated hosts. Regardless of the contribution of the internally deleted genomes in viral phenotypes, the novel high interferon-inducing vaccine candidate engineered to possess both the NS1Δ76-86 and PB2-D309N mutations appears to be highly efficacious in vaccinated chickens. However, the use of live attenuated influenza vaccine in poultry farms is generally discouraged due to safety concerns related to emergence of reassortant viruses with unknown virulence. In ovo vaccination of chicken embryos is widely used to prevent multiple avian infectious diseases and can be used to mitigate the safety concerns related to the use of live influenza vaccines on farms. However, in ovo delivery of IAVs results in high embryo mortality and therefore severely affects egg hatchability. Therefore, in the last part of this study, we asked whether we could develop safe and effective live attenuated influenza vaccines that can be used for in ovo vaccination of chickens. We first showed that the enhanced interferon responses induced by the double mutant virus is not enough to attenuate the virus in ovo. To reduce the pathogenicity of the virus for chicken embryos, we replaced the H7 hemagglutinin cleavage site of the virus (PENPKTR/GL) with that of the H6 viruses (PQIETR/GL) and disrupted the ribosomal frameshifting site responsible for viral polymerase acidic X protein expression. Strikingly, in ovo vaccination of chickens with the modified vaccine had minimal effects on hatchability while protecting the vaccinated chickens against the heterologous challenge at two weeks of age. In conclusion, this study has demonstrated that underappreciated subpopulations in viral quasispecies can be exploited to enhance the effectiveness of live attenuated influenza vaccines. Specific mutations within the viral genome may enhance the de novo generation of defective viral genes in viral populations. Moreover, live attenuated influenza vaccines intended for in ovo application can be optimized further through genetic engineering to enhance vaccine safety and egg hatchability.