One horse was euthanized after showing severe neurological signs associated with the disease and the second horse is currently under observation in what it called a biosecure location.
"The Department is taking quick and appropriate actions to control and mitigate this disease," said state veterinarian Dr Keith Roehr.
Both diagnosed horses had recently attended the National Cutting Horse Association's Western National Championships in Ogden, Utah.
"We will continue to trace the movement of these horses and those horses they came into contact with in order to protect Colorado's equine industry," Roehr said.
The Colorado Department of Agriculture is working with the Utah State Veterinarian to investigate the location as a point of interest for the infection.
EHV-1 is not transmissible to people, but is a serious disease of horses that can cause respiratory, neurologic disease and death.
The most common way for EHV-1 to spread is by direct horse-to-horse contact. The virus can also spread through the air, contaminated equipment, clothing and hands.
Symptoms include fever, decreased co-ordination, nasal discharge, urine dribbling, loss of tail tone, hind limb weakness, leaning against a wall or fence to maintain balance, lethargy, and the inability to rise.
While there is no cure, the symptoms of the disease may be treatable.
The symptoms usually appear four to six days after infection by the virus.
The cutting horse championships were held from April 29 to May 8.