The genus Henipavirus in the family Paramyxoviridae contains two viruses, Hendra virus (HeV) and Nipah virus (NiV) for which pteropid bats act as the main natural reservoir. Each virus also causes serious and commonly lethal infection of people as well as various species of domestic animals, however little is known about the associated mechanisms of pathogenesis. Here, we report the isolation and characterization of a new paramyxovirus from pteropid bats, Cedar virus (CedPV), which shares significant features with the known henipaviruses. The genome size (18,162 nt) and organization of CedPV is very similar to that of HeV and NiV; its nucleocapsid protein displays antigenic cross-reactivity with henipaviruses; and it uses the same receptor molecule (ephrin-B2) for entry during infection. Preliminary challenge studies with CedPV in ferrets and guinea pigs, both susceptible to infection and disease with known henipaviruses, confirmed virus replication and production of neutralizing antibodies although clinical disease was not observed. In this context, it is interesting to note that the major genetic difference between CedPV and HeV or NiV lies within the coding strategy of the P gene, which is known to play an important role in evading the host innate immune system. Unlike HeV, NiV, and almost all known paramyxoviruses, the CedPV P gene lacks both RNA editing and also the coding capacity for the highly conserved V protein. Preliminary study indicated that CedPV infection of human cells induces a more robust IFN-β response than HeV.