Haemophilus parasuis is a commensal of the upper respiratory tract in pigs and also the causative agent of Glässer’s disease, which results in significant morbidity and mortality in pigs worldwide. Isolates of H. parasuis are characterized into 15 serotypes by their capsular polysaccharide. To investigate the role capsule plays in H. parasuis virulence and host interaction, a capsule mutant of the serotype 5 strain 265 was generated (265∆cap). The 265∆cap mutant was unable to cause signs of systemic disease during a pig challenge study and had increased sensitivity to complement killing. When compared to the parent strain, 265Δcap produced more robust biofilm and adhered equivalently to 3D4/31 cells; however, it was unable to persistently colonize the nasal cavity of inoculated pigs, with all pigs clearing 265Δcap by 5 days post-challenge. Only a mild increase in serum antibody to 265Δcap sonicate was seen post-exposure and upon intranasal challenge of the 265Δcap inoculated animals 21 days later with wild type H. parasuis 265, all animals developed clinical signs consistent with Glässer’s disease and H. parasuis was isolated from one or more systemic sites (serosa, joint, serum, and/or cerebral spinal fluid) from all pigs. Our results indicate the importance of capsule to a fully virulent phenotype in vivo. Capsular polysaccharide plays an important role in resistance to complement killing, which may be a key factor in the dissemination of H. parasuis to systemic sites. In this study, we also found capsule to be an essential factor in H. parasuis 265 for persistent colonization of the swine nasal cavity. However, because of the rapid clearance of 265Δcap from the nasal cavity, generation of antibody was minimal and no protection was provided against challenge with the parent strain making 265Δcap a poor modified live vaccine candidate.