Background: Dengue is currently the most important arthropod-borne viral disease of humans. Recent work has shown dengue virus displays limited replication in its primary vector, the mosquito Aedes aegypti, when the insect harbors the endosymbiotic bacterium Wolbachia pipientis. Wolbachia-mediated inhibition of virus replication may lead to novel methods of arboviral control, yet the functional and cellular mechanisms that underpin it are unknown. Methodology/Principal Findings: Using paired Wolbachia-infected and uninfected Aedes-derived cell lines and dengue virus, we confirm the phenomenon of viral inhibition at the cellular level. Although Wolbachia imposes a fitness cost to cells via reduced proliferation, it also provides a significant degree of protection from virus-induced mortality. The extent of viral inhibition is related to the density of Wolbachia per cell, with highly infected cell lines showing almost complete protection from dengue infection and dramatically reduced virus titers compared to lines not infected with the bacteria. Conclusions/Significance: We have shown that cells infected with Wolbachia display inhibition of dengue virus replication, that the extent of inhibition is related to bacterial density and that Wolbachia infection, although costly, will provide a fitness benefit in some circumstances. Our results parallel findings in mosquitoes and flies, indicating that cell line models will provide useful and experimentally tractable models to study the mechanisms underlying Wolbachia-mediated protection from viruses.