Schmallenberg virus (SBV) is the cause of severe fetal malformations when immunologically naïve pregnant ruminants are infected. In those malformed fetuses, a "hot-spot"-region of high genetic variability within the N-terminal region of the viral envelope protein Gc has been observed previously, and this region co-localizes with a known key immunogenic domain. We studied a series of M-segments of those SBV variants from malformed fetuses with point mutations, insertions or large in-frame deletions of up to 612 nucleotides. Furthermore, a unique cell-culture isolate from a malformed fetus with large in-frame deletions within the M-segment was analyzed. Each Gc-protein with amino acid deletions within the "hot spot" of mutations failed to react with any neutralizing anti-SBV monoclonal antibodies or a domain specific antiserum. In addition, in vitro virus replication of the natural deletion variant could not be markedly reduced by neutralizing monoclonal antibodies or antisera from the field. The large-deletion variant of SBV that could be isolated in cell culture was highly attenuated with an impaired in vivo replication following the inoculation of sheep. In conclusion, the observed amino acid sequence mutations within the N-terminal main immunogenic domain of glycoprotein Gc result in an efficient immune evasion from neutralizing antibodies in the special environment of a developing fetus. These SBV-variants were never detected as circulating viruses, and therefore should be considered to be dead-end virus variants, which are not able to spread further. The observations described here may be transferred to other orthobunyaviruses, particularly those of the Simbu serogroup that have been shown to infect fetuses. Importantly, such mutant strains should not be included in attempts to trace the spatial-temporal evolution of orthobunyaviruses in molecular-epidemiolocal approaches during outbreak investigations.