Understanding the pathogenesis of infection by neurotropic viruses represents a major challenge and may improve our knowledge of many human neurological diseases for which viruses are thought to play a role. Borna disease virus (BDV) represents an attractive model system to analyze the molecular mechanisms whereby a virus can persist in the central nervous system (CNS) and lead to altered brain function, in the absence of overt cytolysis or inflammation. Recently, we showed that BDV selectively impairs neuronal plasticity through interfering with protein kinase C (PKC)-dependent signaling in neurons. Here, we tested the hypothesis that BDV phosphoprotein (P) may serve as a PKC decoy substrate when expressed in neurons, resulting in an interference with PKC-dependent signaling and impaired neuronal activity. By using a recombinant BDV with mutated PKC phosphorylation site on P, we demonstrate the central role of this protein in BDV pathogenesis. We first showed that the kinetics of dissemination of this recombinant virus was strongly delayed, suggesting that phosphorylation of P by PKC is required for optimal viral spread in neurons. Moreover, neurons infected with this mutant virus exhibited a normal pattern of phosphorylation of the PKC endogenous substrates MARCKS and SNAP-25. Finally, activity-dependent modulation of synaptic activity was restored, as assessed by measuring calcium dynamics in response to depolarization and the electrical properties of neuronal networks grown on microelectrode arrays. Therefore, preventing P phosphorylation by PKC abolishes viral interference with neuronal activity in response to stimulation. Our findings illustrate a novel example of viral interference with a differentiated neuronal function, mainly through competition with the PKC signaling pathway. In addition, we provide the first evidence that a viral protein can specifically interfere with stimulus-induced synaptic plasticity in neurons.