Viral noncoding RNAs have been shown to play an important role in virus-host interplay to facilitate virus replication. We report that members of the genus Flavivirus, a large group of medically important encephalitic RNA viruses, produce a unique and highly structured noncoding RNA of 0.3-0.5 kb derived from the 3' untranslated region of the viral genome. Using West Nile virus as a model, we show that this subgenomic RNA is a product of incomplete degradation of viral genomic RNA by cellular ribonucleases. Highly conserved RNA structures located at the beginning of the 3' untranslated region render this RNA resistant to nucleases, and the resulting subgenomic RNA product is essential for virus-induced cytopathicity and pathogenicity. Thus, flaviviruses evolved a unique strategy to generate a noncoding RNA product that allows them to kill the host more efficiently.