Alpha interferon (IFN-α)-based therapy can effectively treat chronic hepatitis B virus (HBV) infection, which causes life-threatening complications. Responses to IFN-α therapy vary greatly in chronic hepatitis B (CHB) patients, but underlying mechanisms are almost unknown. In this study, we found that IFN-α treatment induced a marked decrease of microRNA-122 (miR-122) expression in hepatocytes. We next showed that IFN-α-induced miR-122 downregulation was only partly due to transcriptional suppression. One IFN-stimulated gene (ISG), NT5C3, which was identified as a miR-122 target, efficiently inhibited miR-122 by binding and sequestering miR-122 with its mRNA 3'-untranslated region (3'-UTR), indicating that this ISG is involved in IFN-α-mediated miR-122 suppression. Notably, the inhibitory effect of IFN-α on miR-122 was completely abolished by blocking IFN-α-induced upregulation of NT5C3 mRNA expression by RNA interference (RNAi). Meanwhile, we observed that miR-122 dramatically inhibited HBV expression and replication. Finally, we showed that IFN-α-mediated HBV-inhibitory effects could be enhanced significantly by blocking IFN-α-induced downregulation of miR-122. We therefore concluded that IFN-α-induced inhibition of miR-122 may negatively affect the anti-HBV function of IFN-α. These data provide valuable insights for a better understanding of the antiviral mechanism of IFN-α and raise further potential interest in enhancing its anti-HBV efficacy.