Plasmacytoid dendritic cells (pDC) have been shown to efficiently sense HCV- or HIV-infected cells, using a virion-free pathway. Here, we demonstrate for classical swine fever virus, a member of the Flaviviridae, that this process is much more efficient in terms of interferon-alpha induction when compared to direct stimulation by virus particles. By employment of virus replicon particles or infectious RNA which can replicate but not form de novo virions, we exclude a transfer of virus from the donor cell to the pDC. pDC activation by infected cells was mediated by a contact-dependent RNA transfer to pDC, which was sensitive to a TLR7 inhibitor. This was inhibited by drugs affecting the cytoskeleton and membrane cholesterol. We further demonstrate that a unique viral protein with ribonuclease activity, the viral E(rns) protein of pestiviruses, efficiently prevented this process. This required intact ribonuclease function in intracellular compartments. We propose that this pathway of activation could be of particular importance for viruses which tend to be mostly cell-associated, cause persistent infection, and are non-cytopathogenic.