Human parainfluenza virus type 1 (hPIV1) and 3 (hPIV3) cause seasonal epidemics, but little is known about their interaction with human airway cells. In this study, we determined cytopathology, replication, and progeny virion release from human airway cells during long-term infection in vitro. Both viruses readily established persistent infection without causing significant cytopathic effects. However, assembly and release of hPIV1 rapidly declined in sharp contrast to hPIV3 due to impaired viral ribonucleocapsid (vRNP) trafficking and virus assembly. Transcriptomic analysis revealed that both viruses induced similar levels of type I and III IFNs. However, hPIV1 induced specific ISGs stronger than hPIV3, such as MX2, which bound to hPIV1 vRNPs in infected cells. In addition, hPIV1 but not hPIV3 suppressed genes involved in lipid biogenesis and hPIV1 infection resulted in ubiquitination and degradation of 3-hydroxy-3-methylglutaryl-coenzyme A reductase, a rate limiting enzyme in cholesterol biosynthesis. Consequently, formation of cholesterol-rich lipid rafts was impaired in hPIV1 infected cells. These results indicate that hPIV1 is capable of regulating cholesterol biogenesis, which likely together with ISGs contributes to establishment of a quiescent infection.