Premembrane (prM) and envelope (E) proteins, the major structural proteins of Japanese encephalitis virus (JEV) each contain single potential N-glycosylation site. In this study, the role of N-glycosylation of these proteins on their folding and activity were investigated. Three mutant prM and/or E (prM-E) genes lacking N-glycosylation sites were generated by site-directed mutagenesis. The effects of the N-glycan on folding, secretion and cytotoxicity of mutant proteins were determined by comparison with their wild type (wt) counterparts. Removal of N-glycan from the prM protein resulted in a complete misfolding of the E protein and failure to form virus-like particles (VLPs). A similar removal of N-glycan from the E protein led to a low efficiency of its folding and VLPs formation. The secretion and cytotoxicity of the E protein was also markedly impaired in case the glycosylation sites in the prM or E or both proteins were removed. These results suggest that the N-glycosylation of the prM protein is critical to the folding of the E protein, which makes it pivotal in the cytotoxicity of JEV particles and their production.