Influenza B virus non-structural protein 1 counteracts ISG15 antiviral activity by sequestering ISGylated viral proteins

The ubiquitin-like protein ISG15 and its conjugation to proteins (ISGylation) are strongly induced by type I interferon. Influenza B virus encodes non-structural protein 1 (NS1B) that binds human ISG15 and provides an appropriate model for determining how ISGylation affects virus replication in human cells. Here using a recombinant virus encoding a NS1B protein defective in ISG15 binding, we show that NS1B counteracts ISGylation-mediated antiviral activity by binding and sequestering ISGylated viral proteins, primarily ISGylated viral nucleoprotein (NP), in infected cells. ISGylated NP that is not sequestered by mutant NS1B acts as a dominant-negative inhibitor of oligomerization of the more abundant unconjugated NP. Consequently formation of viral ribonucleoproteins that catalyse viral RNA synthesis is inhibited, causing decreased viral protein synthesis and virus replication. We verify that ISGylated NP is largely responsible for inhibition of viral RNA synthesis by generating recombinant viruses that lack known ISGylation sites in NP.