Flaviviruses have a monopartite positive-stranded RNA genome, which serves as the sole mRNA for protein translation. Cap-dependent translation produces a polyprotein precursor that is co- and posttranslationally processed by proteases to yield the final protein products. In this study, using tick-borne encephalitis virus (TBEV), we constructed an artificial bicistronic flavivirus genome (TBEV-bc) in which the capsid protein and the nonstructural proteins were still encoded in the cap cistron but the coding region for the surface proteins prM and E was moved to a separate translation unit under the control of an internal ribosome entry site element inserted into the 3' noncoding region. Mutant TBEV-bc was shown to produce particles that packaged the bicistronic RNA genome and were infectious for BHK-21 cells and mice. Compared to wild-type controls, however, TBEV-bc was less efficient in both RNA replication and infectious particle formation. We took advantage of the separate expression of the E protein in this system to investigate the role in viral assembly of the second transmembrane region of protein E (E-TM2), a second copy of which was retained in the cap cistron to fulfill its other role as an internal signal sequence in the polyprotein. Deletion analysis and replacement of the entire TBEV E-TM2 region with its counterpart from another flavivirus revealed that this element, apart from its role as a signal sequence, is important for virion formation.