Flaviviruses are arthropod-borne viruses found worldwide and are responsible for significant human and veterinary diseases including dengue, Zika and West Nile fever. A subset of flaviviruses can only replicate in the mosquito hosts and recent studies have shown that some can interfere with pathogenic flaviviruses in the mosquitoes and limit replication and transmission of the latter. We report a genetically divergent clade of insect-specific flaviviruses (ISFs) from Anopheles mosquitoes, separate from the existent Aedes- and Culex-associated ISF clades. The identification of distinct clades for each mosquito genus provides new insights into the evolution and ecology of flaviviruses. We have determined the complete sequence of the RNA genome for three of these viruses, Karumba virus (KRBV), Haslams Creek virus (HaCV) and Mac Peak virus (McPV) - found in high prevalence in some Anopheles mosquito populations, and the first half of the genome of Dairy Swamp virus (DSwV). Analysis of nucleotide composition in the KRBV and McPV sequences revealed a pattern consistent with the virus evolving to replicate only in insects. However, none of these viruses replicate in arthropod cell lines, nor does KRBV replicate in heterologous Anopheles species, thus exhibiting unprecedented specialisation for their host species. We therefore produced recombinant KRBV NS1, anti-KRBV mouse serum and monoclonal antibodies, which we used to detect KRBV in the midgut epithelium of naturally infected mosquitoes by immunohistochemistry. We also demonstrated the presence of replicative dsRNA and siRNA responses in the host mosquito species. Collectively these results provide strong evidence of a functional replicating virus, albeit with the most specialised host-restriction reported to date for any ISF. These findings represent a significant advance in our knowledge of mosquito-borne flavivirus ecology, host-restriction and evolution. Understanding this unprecedented host-restriction in ISFs could help identify the mechanisms involved in flavivirus evolution and their emergence as mosquito-borne pathogens.