alpha-Dystroglycan (alpha-DG) is an important cellular receptor for extracellular matrix (ECM) proteins as well as the Old World arenaviruses lymphocytic choriomeningitis virus (LCMV) and the human pathogenic Lassa fever virus (LFV). Specific O-glycosylation of alpha-DG is critical for its function as receptor for ECM proteins and arenaviruses. Here, we investigated the impact of arenavirus infection on alpha-DG expression. Infection with an immunosuppressive LCMV isolate caused a marked reduction in expression of functional alpha-DG without affecting biosynthesis of DG core protein or global cell surface glycoprotein expression. The effect was caused by the viral glycoprotein (GP), and it critically depended on alpha-DG binding affinity and GP maturation. An equivalent effect was observed with LFVGP. Viral GP was found to associate with a complex between DG and the glycosyltransferase LARGE in the Golgi. Overexpression of LARGE restored functional alpha-DG expression in infected cells. We provide evidence that virus-induced down-modulation of functional alpha-DG perturbs DG-mediated assembly of laminin at the cell surface, affecting normal cell-matrix interactions.