Borna disease virus (BDV) genetic information is encoded in a highly condensed non-segmented RNA genome of negative polarity. Replication and transcription of the genome occurs in the nucleus, enabling the virus to employ the cellular splicing machinery to process primary transcripts and to regulate expression of viral gene products. BDV establishes a non-cytolytic, persistent infection that in animals is mainly restricted to neurons of the central nervous system. Based on these unique properties, BDV represents the prototype member of the virus family Bornaviridae in the order Mononegavirales. Analysis of molecular aspects of BDV replication has long been hampered by the lack of a reverse genetics system. Only recently, artificial BDV minigenomes permitted the reconstitution of the viral polymerase complex, allowing finally the recovery of BDV from cDNA. As in other families of the Mononegavirales, the active polymerase complex of BDV is composed of the polymerase (L), the nucleoprotein (N) and the phosphoprotein (P). In addition, the viral X protein was identified as potent negative regulator of polymerase activity. Protein interaction studies combined with minireplicon assays suggested that P is a central regulatory element of BDV replication that directs the assembly of the polymerase complex. Most intriguingly, BDV obtained from cDNA with variable genomic termini suggests a novel strategy for viral replication-control. BDV seems to restrict its propagation efficacy by defined 5' terminal trimming of genomic and antigenomic RNA molecules. This review will summarize these novel findings and will discuss them in the context of BDV neurotropism and persistence.