Deoxynivalenol (DON) toxin production during the infection of F. graminearum in small grain crops is one of the most harmful virulence factors associated with economic losses. Metatranscriptome sequencing and RT-qPCR traced back that the only mycovirus infecting an F. graminearum isolate, designated as Fg-4-2, was a novel strain of Fusarium graminearum virus 1 (FgV1), designated as FgV1-SD4. The isolate Fg-4-2 showed significantly reduced virulence against wheat compared to the virus-free culture, designated as isolate Fg-4-1, which was obtained by deep freezing and single conidial germination. Notably, no DON accumulation was detected in the harvested wheat seeds infected by Fg-4-2, whereas ~18 ppm DON was detected in seeds infected by Fg-4-1. Comparison of the genome sequence of FgV1-SD4 with other identified strains of FgV1, i.e., FgV1-DK21 and FgV1-ch, indicates mutations on ORF-2 and the 3' -UTR in the genome that might be associated with hypovirulence. This mycovirus strain alone and specific genetic components of FgV1-SD4 can be further optimized to be developed as a biocontrol agent to reduce Fusarium head blight and to lower the DON accumulation levels in small grain crops due to this fungal disease.