The glycoprotein Erns plays a central role in the biology of the pestivirus bovine viral diarrhea virus (BVDV). This soluble endonuclease mediates the escape from an interferon (IFN) response in the infected fetus, thereby permitting the establishment of persistent infection. Viral single-stranded (ss) and double-stranded (ds) RNA act as potent IFN inducing signals and we previously showed that Erns efficiently cleaves these substrates, thereby inhibiting an IFN response that is crucial for successful fetal infection. Considering that a large variety of RNases and DNases require dimerisation to cleave double-stranded substrates, the activity of Erns against dsRNA was postulated to depend on homodimer formation mediated by disulfide bonds involving residue Cys171. Here, we show that monomeric Erns is equally able to cleave dsRNA and to inhibit dsRNA-induced IFN synthesis as the wild-type form. Furthermore, both forms were able to degrade RNA within a DNA/RNA- as well as within a methylated RNA/RNA-hybrid, with the DNA and the methylated RNA strand being resistant to degradation. These results support our model that Erns acts as 'nicking endoribonuclease' degrading ssRNA within double-stranded substrates. This efficiently prevents the activation of IFN and helps to maintain a state of innate immunotolerance in persistently infected animals.