Dengue virus is an emerging global health threat. Its major envelope glycoprotein, E, mediates viral attachment and entry by membrane fusion. A crystal structure of the soluble ectodomain of E from dengue virus type 2 reveals a hydrophobic pocket lined by residues that influence the pH threshold for fusion. The pocket, which accepts a hydrophobic ligand, opens and closes through a conformational shift in a β-hairpin at the interface between two domains. These features point to a structural pathway for the fusion-activating transition and suggest a strategy for finding small-molecule inhibitors of dengue and other flaviviruses.