Some isolates of Yersinia pseudotuberculosis produce the cytotoxic necrotizing factor (CNFY), but the functional consequences of this toxin for host-pathogen interactions during the infection are unknown. In the present study we show that CNFY has a strong influence on virulence. We demonstrate that the CNFY toxin is thermo-regulated and highly expressed in all colonized lymphatic tissues and organs of orally infected mice. Most strikingly, we found that a cnfY knock-out variant of a naturally toxin-expressing Y. pseudotuberculosis isolate is strongly impaired in its ability to disseminate into the mesenteric lymph nodes, liver and spleen, and has fully lost its lethality. The CNFY toxin contributes significantly to the induction of acute inflammatory responses and to the formation of necrotic areas in infected tissues. The analysis of the host immune response demonstrated that presence of CNFY leads to a strong reduction of professional phagocytes and natural killer cells in particular in the spleen, whereas loss of the toxin allows efficient tissue infiltration of these immune cells and rapid killing of the pathogen. Addition of purified CNFY triggers formation of actin-rich membrane ruffles and filopodia, which correlates with the activation of the Rho GTPases, RhoA, Rac1 and Cdc42. The analysis of type III effector delivery into epithelial and immune cells in vitro and during the course of the infection further demonstrated that CNFY enhances the Yop translocation process and supports a role for the toxin in the suppression of the antibacterial host response. In summary, we highlight the importance of CNFY for pathogenicity by showing that this toxin modulates inflammatory responses, protects the bacteria from attacks of innate immune effectors and enhances the severity of a Yersinia infection.