It was the same strain found last month in two flocks in Delaware, but officials said there is no know connection between the Maryland and Delaware cases.
The H7 strain was found among samples sent to the U.S. Department of Agriculture's veterinary lab in Iowa from the Delaware laboratory testing chickens from farms in the Delmarva area.
The samples came from a Pocomoke City farm with four poultry houses and about 118,000 6-week-old broiler chickens.
Officials quarantined the farm Friday evening, Maryland Agriculture Secretary Lewis R. Riley said in a news release.
The birds were to be destroyed this morning and their remains kept on the farm in the chicken houses where they are killed.
"We are taking all measures possible to protect Maryland's farm community and our poultry industry," Riley said.
Riley urged everyone else associated with the poultry industry on the Eastern Shore to "continue to practice the highest level of biosecurity on their farms, in their businesses and at home."
Officials said 210,000 chickens on another farm about a mile from the Pocomoke City facility and under the same ownership also would be destroyed "because of the close relationship between these farms and the shared personnel and equipment."
But they said they would keep under observation some 1-week-old birds on a third farm owned by the same farmer about 2 miles from the original farm.
Additionally, the state agriculture department quarantined 71 farms in a 6-mile radius of the infected farm. All of those will be tested for avian flu, and officials said testing would continue across the Delmarva peninsula until at least March 16.
Poultry in Maryland accounted for 31 percent of the state's agriculture industry in 2002. That amounted to $441 million of the state's $1.4 billion agriculture industry that year.
There are approximately 1,100 poultry farms on Maryland's Eastern Shore.
The state's last outbreak of avian flu was in 1993 among game birds on a Queen Anne's County farm.