Recombinant pestivirus envelope glycoprotein E(rns) has been shown to interfere with dsRNA-induced interferon (IFN-alpha/beta) synthesis. This study demonstrated that authentic, enzymically active E(rns) produced in mammalian cells prevented a dsRNA-induced IFN response when present in the supernatant of bovine cells. Strikingly, IFN synthesis of cells expressing E(rns) was eliminated after extracellular addition, but not transfection, of dsRNA. Importantly, the same applied to cells infected with bovine viral diarrhea virus (BVDV) expressing E(rns) but lacking the N-terminal protease N(pro). Free E(rns) concentrations circulating in the blood of animals persistently infected with BVDV were determined to be approximately 50 ng ml(-1), i.e. at a similar order of magnitude as that displaying an effect on dsRNA-induced IFN expression in vitro. Whilst N(pro) blocks interferon regulatory factor-3-dependent IFN induction in infected cells, E(rns) may prevent constant IFN induction in uninfected cells by dsRNA that could originate from pestivirus-infected cells. This probably contributes to the survival of persistently BVDV-infected animals and maintains viral persistence in the host population.