Defining the precise cellular mechanisms of neutralization by potently inhibitory antibodies is important for understanding how the immune system successfully limits viral infections. We recently described a potently inhibitory monoclonal antibody (MAb E16) against the envelope (E) protein of West Nile virus (WNV) that neutralizes infection even after virus has spread to the central nervous system. Herein, we define its mechanism of inhibition. E16 blocks infection primarily at a postattachment step as antibody-opsonized WNV enters permissive cells but cannot escape from endocytic compartments. These cellular experiments suggest that E16 blocks the acid-catalyzed fusion step that is required for nucleocapsid entry into the cytoplasm. Indeed, E16 directly inhibits fusion of WNV with liposomes. Additionally, low-pH exposure of E16-WNV complexes in the absence of target membranes did not fully inactivate infectious virus, further suggesting that E16 prevents a structural transition required for fusion. Thus, a strongly neutralizing anti-WNV MAb with therapeutic potential is potently inhibitory because it blocks viral fusion and thereby promotes clearance by delivering virus to the lysosome for destruction.