West Nile virus (WNV) and dengue virus (DENV) are highly pathogenic, mosquito-borne flaviviruses (family Flaviviridae) that cause severe disease and death in humans. WNV and DENV actively replicate in mosquitoes and human hosts and thus encounter different host immune responses. RNA interference (RNAi) is the predominant antiviral response against invading RNA viruses in insects and plants. As a countermeasure, plant and insect RNA viruses encode RNA silencing suppressor (RSS) proteins to block the generation/activity of small interfering RNA (siRNA). Enhanced flavivirus replication in mosquitoes depleted for RNAi factors suggests an important biological role for RNAi in restricting virus replication, but it has remained unclear whether or not flaviviruses counteract RNAi via expression of an RSS. First, we established that flaviviral RNA replication suppressed siRNA-induced gene silencing in WNV and DENV replicon-expressing cells. Next, we showed that none of the WNV encoded proteins displayed RSS activity in mammalian and insect cells and in plants by using robust RNAi suppressor assays. In contrast, we found that the 3'-untranslated region-derived RNA molecule known as subgenomic flavivirus RNA (sfRNA) efficiently suppressed siRNA- and miRNA-induced RNAi pathways in both mammalian and insect cells. We also showed that WNV sfRNA inhibits in vitro cleavage of double-stranded RNA by Dicer. The results of the present study suggest a novel role for sfRNA, i.e., as a nucleic acid-based regulator of RNAi pathways, a strategy that may be conserved among flaviviruses.