We provide experimental evidence of a replication enhancer element (REE) within the capsid gene of tick-borne encephalitis virus (TBEV, genus Flavivirus). Thermodynamic and phylogenetic analyses predicted that the REE folds as a long stable stem–loop (designated SL6), conserved among all tick-borne flaviviruses (TBFV). Homologous sequences and potential base pairing were found in the corresponding regions of mosquito-borne flaviviruses, but not in more genetically distant flaviviruses. To investigate the role of SL6, nucleotide substitutions were introduced which changed a conserved hexanucleotide motif, the conformation of the terminal loop and the base-paired dsRNA stacking. Substitutions were made within a TBEV reverse genetic system and recovered mutants were compared for plaque morphology, single-step replication kinetics and cytopathic effect. The greatest phenotypic changes were observed in mutants with a destabilized stem. Point mutations in the conserved hexanucleotide motif of the terminal loop caused moderate virus attenuation. However, all mutants eventually reached the titre of wild-type virus late post-infection. Thus, although not essential for growth in tissue culture, the SL6 REE acts to up-regulate virus replication. We hypothesize that this modulatory role may be important for TBEV survival in nature, where the virus circulates by non-viraemic transmission between infected and non-infected ticks, during co-feeding on local rodents.