Bluetongue is a major infectious disease of ruminants caused by bluetongue virus (BTV), an ''arbovirus'' transmitted from infected to susceptible hosts by biting midges. Historically, bluetongue has been endemic almost exclusively in temperate and tropical areas of the world. However, in the last decade BTV has spread extensively in several geographical areas causing a serious burden to both animal health and the economy. BTV possesses a double-stranded RNA segmented genome. For over two decades, it has been widely accepted that the 10 segments of BTV genome encode for 7 structural and 3 nonstructural proteins. In this study we discovered that BTV expresses a previously uncharacterized non-structural protein that we designated NS4. Although BTV replicates exclusively in the cytoplasm, we found NS4 to localize in the nucleoli of the infected cells. Our study shows that NS4 is not needed for viral replication both in mammalian and insect cells, and in mice. However, NS4 confers a replication advantage to BTV in cells in an antiviral state induced by interferon. In conclusion, we have elucidated a possible route by which BTV can counteract the defences of the host. Sequence analysis 65 full-length segment 9 sequences representing 24 BTV serotypes were obtained from GenBank. Amino acid conservation plots and secondary structure predictions were obtained using the CLC Genomics Workbench (CLC, Aarhus, Denmark) software and bioinformatics tools available online (the PSIPRED server [http:// bioinf.cs.ucl.ac.uk/psipred], and the Network Protein Sequence Analysis (nps@) server, [http://npsa-pbil.ibcp.fr/]).