Dengue virus nonstructural protein 1 (NS1) is expressed on the surface of infected cells and is a target of human antibody responses to dengue virus infection. We show here that dengue virus uses the cellular glycosyl-phosphatidylinositol (GPI) linkage pathway to express a GPI-anchored form of NS1 and that GPI anchoring imparts a capacity for signal transduction in response to binding of NS1-specific antibody. This study is the first to identify GPI linkage of a virus-encoded protein. The GPI anchor addition signal for NS1 was identified, by transfection of HeLa cells with dengue cDNA constructs, as a downstream hydrophobic domain in NS2A. GPI linkage of NS1 in both transfected and infected cells was demonstrated by cleavage of NS1 from the surface by PI-specific phospholipase C and by metabolic incorporation of the GPI-specific components ethanolamine and inositol. In common with other GPI-anchored proteins, addition of specific antibody resulted in signal transduction, as evidenced by tyrosine phosphorylation of cellular proteins. Antibody-induced signal transduction by GPI-linked NS1 suggests a mechanism of cellular activation that may contribute to the pathogenesis of human dengue disease. Signal transduction by a GPI-anchored viral antigen interacting with a specific antibody that it induces is a new concept in the pathogenesis of viral disease.