Flaviviruses are a large group of positive strand RNA viruses transmitted by arthropods that include many human pathogens such as West Nile virus (WNV), Japanese encephalitis virus (JEV), yellow fever virus, dengue virus, and tick-borne encephalitis virus. All members in this genus tested so far are shown to produce a unique subgenomic flavivirus RNA (sfRNA) derived from the 3' untranslated region (UTR). sfRNA is a product of incomplete degradation of genomic RNA by the cell 5'-3' exoribonuclease XRN1 which stalls at highly ordered secondary RNA structures at the beginning of the 3'UTR. Generation of sfRNA results in inhibition of XRN1 activity leading to an increase in stability of many cellular mRNAs. Mutant WNV deficient in sfRNA generation was highly attenuated displaying a marked decrease in cytopathicity in cells and pathogenicity in mice. sfRNA has also been shown to inhibit the antiviral activity of IFN-α/β by yet unknown mechanism and of the RNAi pathway by likely serving as a decoy substrate for Dicer. Thus, sfRNA is involved in modulating multiple cellular pathways to facilitate viral pathogenicity; however the overlying mechanism linking all these multiple functions of sfRNA remains to be elucidated.