BACKGROUND: Rabies virus (RABV) causes rabies disease resulting in >55,000 human deaths/year. The multifunctional RABV P-protein has essential roles in genome replication, and forms interactions with cellular STAT proteins that are thought to underlie viral antagonism of interferon-dependent immunity. However, the molecular details of P-protein-STAT interaction, and its importance to disease are unresolved. METHODS: Studies were performed using sequence/structure analysis, mutagenesis, immunoprecipitation, luciferase and qRT-PCR-based signaling assays, confocal microscopy and reverse genetics/in vivo infection. RESULTS: We identified a hydrophobic pocket of the P-protein C-terminal domain as critical to STAT-binding/antagonism. This interface was found to be functionally and spatially independent of the region responsible for N-protein interaction, which is critical to genome replication. Based on these findings, we generated the first mutant RABV lacking STAT-association. Growth of the virus in vitro was unimpaired, but it lacked STAT-antagonist function and was highly sensitive to interferon. Importantly, growth of the virus was strongly attenuated in brains of infected mice, producing no major neurological symptoms, compared with the invariably lethal wild-type virus. CONCLUSIONS: These data represent direct evidence that P-protein-STAT interaction is critical to rabies, and provide novel insights into the mechanism by which RABV coordinates distinct functions in interferon antagonism and replication.