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Since 2002 there has been a rise in arthrogryposis/hydranencephaly incidence in Israel, caused by Akabane viruses (AKAV) and possibly by Aino viruses. In response to the outbreak, serological, molecular-diagnostic and research tools were developed. AKAV sequences were detected by real-time RT-PCR in the brain tissue of 2 out of 20 tested calves and lambs that suffered from hydranencephaly. When the S segments from the two infected calves were characterized, it was concluded that the S genome were cleaved. In order to localize the cleavage site, the 3' segment of the S genome was cloned, sequenced, and found to be 430 bases long, which indicates a cleavage site between nucleotides 430 and 431 of the S segment in the antigenome. This cleavage site was found to be specific and not a result of degradation processes. Analysis of the S segment RNA secondary structure revealed that the cleavage site was located on a loop structure. Furthermore, flunking the cleavage site there are stretches of 7 or 8 bases long that were part of a stem with low free energy, which could stabilize the loop, making it accessible to an, as yet, uncharacterized cleavage mechanism.