Poa semilatent virus (PSLV), Lychnis ringspot virus (LRSV), and Barley stripe mosaic virus (BSMV) are members of the genus Hordeivirus in the family Virgaviridae. However, the biological properties and molecular genetics of PSLV have not been compared with other hordeiviruses. Here, we have constructed an infectious cDNA clone of the PSLV Canadian strain and provided evidence that PSLV differs from BSMV and LRSV. First, unlike the other two hordeiviruses that replicate in chloroplasts, PSLV induces dramatic structural changes in peroxisome during its infection in barley. The αa replication protein also localizes to peroxisomes, suggesting that PSLV replication occurs in peroxisomes. Second, PSLV encodes a γb protein that shares 19 to 23% identity with those of other hordeiviruses, and its activity as a viral suppressor of RNA (VSR) silencing is distinct from those of BSMV and LRSV. Substitution of the BSMV γb protein with that of PSLV or LRSV revealed a negative correlation between VSR activity and symptom severity of the recombinant BSMV derivatives. Intriguingly, the Ser-Lys-Leu (SKL) peroxisome-targeting signals differ among γb proteins of various hordeiviruses, including some BSMV strains. The presence of the C-terminal SKL motif in the γb protein impairs its silencing suppressor activity and influences symptoms. Finally, we developed a PSLV-based virus-induced gene silencing vector that induced strong and effective silencing phenotypes of endogenous genes in barley, wheat, and millet. Our results shed new light on hordeivirus pathogenesis and evolution, and provide an alternative tool for genomics studies of model hosts and economically important monocots.