Powassan virus (POWV) is an emerging tick-borne Flavivirus that causes lethal encephalitis and long term neurologic damage. Currently there are no POWV therapeutics, licensed vaccines or reverse genetics systems for producing infectious POWVs from recombinant DNA. Here we used a circular polymerase extension reaction (CPER) approach to generate recombinant LI9 (recLI9) POWVs with attenuating NS1 protein mutations and a recLI9-split-eGFP reporter virus. Flavivirus NS1 proteins are highly conserved glycoproteins that regulate replication, spread and neurovirulence. POWV NS1 proteins contain three putative N-linked glycosylation sites that we modified individually in infectious recLI9 mutants (N85Q, N208Q, N224Q). NS1 glycosylation site mutations reduced replication kinetics and were attenuated with a 1-2 log decrease in infectious titers. The severely attenuated recLI9-N224Q mutant exhibited a 2-3 day delay in focal cell-to-cell spread and reduced NS1 secretion. Like WT LI9, the recLI9-N224Q mutant was lethal when intracranially inoculated into suckling mice. However, footpad inoculation of recLI9-N224Q resulted in the survival of 80% of mice and demonstrated that NS1-N224Q mutations attenuate POWV neuroinvasion in vivo. To monitor NS1 trafficking, we CPER fused a split GFP11-tag to the NS1 C-terminus and generated an infectious reporter virus, recLI9-NS1-GFP11. Cells infected with recLI9-NS1-GFP11 revealed NS1 trafficking in live cells and the novel formation of large NS1 lined intracellular vesicles. An infectious recLI9-NS1-GFP11 reporter virus permits real-time analysis of NS1 functions in POWV replication, assembly and secretion, and provides a platform for evaluating antiviral compounds. Collectively, our robust POWV reverse genetics system permits analysis of viral spread and neurovirulence determinants in vitro and in vivo, and enables the rational genetic design of live attenuated POWV vaccines.