Schmallenberg virus (SBV) was discovered in Germany in late 2011 and then spread rapidly to many European countries. SBV is an orthobunyavirus that causes abortion and congenital abnormalities in ruminants. A virus-encoded non-structural protein, termed NSs, is a major virulence factor of SBV and it is known to promote the degradation of Rpb1, a subunit of the RNA Pol II complex, and therefore hampers global cellular transcription. In this study we found that NSs is mainly localized in the nucleus of infected cells, and, specifically appears to target the nucleolus through a nucleolar localization signal (NoLS) localized between residues 33 and 51 of the protein. NSs co-localizes with nucleolar markers such as B23 (nucleophosmin) and fibrillarin. We observed that in SBV-infected cells, B23 undergoes a nucleolar to nucleoplasm redistribution, evocative of viral-induced nucleolar disruption. In contrast, nucleolar pattern of B23 was unchanged upon infection with a SBV recombinant mutant with NSs lacking the NoLS motif (SBVDeltaNoLS). Interestingly, unlike wild type SBV, the inhibitory activity of SBVDeltaNoLS towards RNA Pol II transcription is impaired. Overall, our results suggest that a putative link exists between NSs-induced nucleolar disruption and its inhibitory function on cellular transcription, which consequently precludes cellular antiviral response and/or induces cell death. IMPORTANCE: Schmallenberg virus (SBV) is an emerging arbovirus of ruminants that has spread in Europe between 2011 and 2013. SBV induces fetal abnormalities during gestation with the central nervous system being one of the most affected organs. The viral-encoded NSs protein acts as a virulent factor by impairing host cell transcription. Here, we show that NSs contains a nucleolar localization signal (NoLS) and induces disorganization of the nucleolus. The NoLS motif in the SBV NSs is absolutely necessary for viral induced inhibition of cellular transcription. To our knowledge, this is the first report of nucleolar functions for NSs within the Bunyaviridae family.