Many cellular noncoding RNAs contain chemically modified nucleotides that are essential for their function. The Epstein-Barr virus expresses two highly abundant noncoding RNAs called EBV-encoded RNA 1 (EBER1) and EBER2. To examine whether these viral RNAs contain modified nucleotides, we purified native EBERs from EBV-infected cells and performed mass spectrometry analysis. While EBER2 contains no modified nucleotides at stoichiometric amounts, EBER1 was found to carry 5-methylcytosine (m5C) modification. Bisulfite sequencing indicated that a single cytosine of EBER1 is methylated in ∼95% of molecules, and the RNA methyltransferase NSUN2 was identified as the EBER1-specific writer. Intriguingly, ablation of NSUN2 and thus loss of m5C modification resulted in an increase in EBER1 levels. We further found that EBER1 is a substrate for the RNase Angiogenin and cleavage in vivo is dependent on the presence of m5C, providing an explanation as to why loss of m5C increases EBER1 levels. Taken together, our observations indicate that m5C, a modification previously shown for tRNAs to oppose Angiogenin-mediated degradation, can also adversely affect RNA stability.