Schmallenberg virus (SBV) belongs to the Simbu serogroup within the family Peribunyaviridae, genus Orthobunyavirus and is transmitted by Culicoides biting midges. Infection of naïve ruminants in a critical phase of gestation may lead to severe congenital malformations. Sequence analysis from viremic animals revealed a very high genome stability. In contrast, sequence variations are frequently described for SBV from malformed fetuses. In addition to S segment mutations, especially within the M segment encoding the major immunogen Gc, point mutations or genomic deletions are also observed. Analysis of the SBV_D281/12 isolate from a malformed fetus revealed multiple point mutations in all three genome segments. It also has a large genomic deletion in the antigenic domain encoded by the M segment compared to the original SBV reference strain 'BH80/11' isolated from viremic blood in 2011. Interestingly, SBV_D281/12 showed a marked replication deficiency in vitro in Culicoides sonorensis cells (KC cells), but not in standard baby hamster kidney cells (BHK-21). We therefore generated a set of chimeric viruses of rSBV_D281/12 and wild-type rSBV_BH80/11 by reverse genetics, which were characterized in both KC and BHK-21 cells. It could be shown that the S segment of SBV_D281/12 is responsible for the replication deficit and that it acts independently from the large deletion within Gc. In addition, a single point mutation at position 111 (S to N) of the nucleoprotein was identified as the critical mutation. Our results suggest that virus variants found in malformed fetuses and carrying characteristic genomic mutations may have a clear 'loss of fitness' for their insect hosts in vitro. It can also be concluded that such mutations lead to virus variants that are no longer part of the natural transmission cycle between mammalian and insect hosts. Interestingly, analysis of a series of SBV sequences confirmed the S111N mutation exclusively in samples of malformed fetuses and not in blood from viremic animals. The characterization of these changes will allow the definition of protein functions that are critical for only one group of hosts.