The ability of many viruses to manipulate the host antiviral immune response often results in complex host-pathogen interactions. In order to study the interaction of dengue virus (DENV) with the Aedes aegypti immune response, we have characterized the DENV infection-responsive transcriptome of the immune-competent A. aegypti cell line Aag2. As in mosquitoes, DENV infection transcriptionally activated the cell line Toll pathway and a variety of cellular physiological systems. Most notably, however, DENV infection down-regulated the expression levels of numerous immune signaling molecules and antimicrobial peptides (AMPs). Functional assays showed that transcriptional induction of AMPs from the Toll and IMD pathways in response to bacterial challenge is impaired in DENV-infected cells. In addition, Escherichia coli, a gram-negative bacteria species, grew better when co-cultured with DENV-infected cells than with uninfected cells, suggesting a decreased production of AMPs from the IMD pathway in virus-infected cells. Pre-stimulation of the cell line with gram-positive bacteria prior to DENV infection had no effect on DENV titers, while pre-stimulation with gram-negative bacteria resulted in an increase in DENV titers. These results indicate that DENV is capable of actively suppressing immune responses in the cells it infects, a phenomenon that may have important consequences for virus transmission and insect physiology.