Virulence of highly pathogenic avian influenza viruses (AIV) is determined by multiple genes and their encoded proteins. In particular, the nonstructural protein 1 (NS1) of viruses is a multifunctional protein that plays an important role in type I interferon (IFN) antagonism, pathogenicity, and determining viral host range. Naturally-occurring truncation or mutation of NS1 during virus evolution attenuates viral replication and pathogenicity, but the mechanisms underlying this phenomenon remain poorly understood. In the present study, we rescued an H5N6 AIV harboring a 113-amino-acid (aa) truncated NS1 at the C-terminus that had previously naturally occurred in an H3N8 equine influenza virus (designated as rHN109 NS1/112). The replication and pathogenicity of the rescued and parental viruses were then assessed in vitro in cells and in vivo in chickens and mice. Replication of rHN109 NS1/112 virus was significantly attenuated in various cells compared to its parental virus. The attenuation of rHN109 NS1/112 virus was subsequently clarified by investigating the effects on IFN and apoptosis signaling pathways via multiple experiments. The results indicated that the 113-aa truncation of NS1 impairs viral inhibition of IFN production and enhances cellular apoptosis in avian and mammalian cells. Animal studies further indicated that replication of the rHN109 NS1/112 virus is remarkably attenuated in chickens. The results of this study improve our understanding of C-terminal region function for NS1 proteins of influenza viruses.