In this study we compared the NS1 protein of Influenza B/Lee/40 and several non-cultured Influenza B virus clinical strains detected in Singapore. In B/Lee/40 virus-infected cells and in cells expressing the recombinant B/Lee/40 NS1 protein a full-length 35 kDa NS1 protein and a 23 kDa NS1 protein species (p23) were detected. Mutational analysis of the NS1 gene indicated that p23 was generated by a novel cleavage event within the linker domain between an aspartic acid and proline at amino acid residues at positions 92 and 93 respectively (DP92–93), and that p23 contained the first 92 amino acids of the NS1 protein. Sequence analysis of the Singapore strains indicated the presence of either DP92–93 or NP92–93 in the NS1 protein, but protein expression analysis showed that p23 was only detected in NS1 proteins with DP92–93.. An additional adjacent proline residue at position 94 (P94) was present in some strains and correlated with increased p23 levels, suggesting that P94 has a synergistic effect on the cleavage of the NS1 protein. The first 145 amino acids of the NS1 protein are required for inhibition of ISG15-mediated ubiquitination, and our analysis showed that Influenza B viruses circulating in Singapore with DP92–93 expressed truncated NS1 proteins and may differ in their capacity to inhibit ISG15 activity. Thus, DP92–93 in the NS1 protein may confer a disadvantage to Influenza B viruses circulating in the human population and interestingly the low frequency of DP92–93detection in the NS1 protein since 2004 is consistent with this suggestion.