Dengue virus (DENV) is a mosquito-transmitted flavivirus that can cause severe disease in humans. The DENV positive strand RNA genome contains 5' and 3' untranslated regions (UTRs) that have been shown to be required for virus replication and interaction with host cell proteins. In the present study LSm1 was identified as a host cellular protein involved in DENV RNA replication. By using two independent methodologies, we demonstrated a critical interaction between LSm1 and the 3' UTR of DENV. Furthermore, the confocal immunofluorescence analysis showed that the interaction between LSm1 and viral RNA is located in P-body around nucleoli in the cytoplasm. LSm1 knockdown by siRNA specifically reduced the levels of viral RNA in DENV-infected cells and infectious DENV particles in the supernatant. These results provide evidence that LSm1 binding to the DENV RNA 3' UTR positively regulates DENV RNA replication.