Innate immune responses provide the host with an early protection barrier against infectious agents, including viruses, and help shape the nature and quality of the subsequent adaptive immune responses of the host. Expression of ISG15 (UCRP), a ubiquitin-like protein, and protein ISGylation are highly increased upon viral infection. We have identified UBP43 (USP18) as an ISG15 deconjugating protease. Protein ISGylation is enhanced in cells deficient in UBP43 (ref. 6). Here we have examined the role of UBP43, encoded by the gene Usp18, in innate immunity to virus infection. Usp18(-/-) mice were resistant to the fatal lymphocytic choriomeningitis and myeloencephalitis that developed in wild-type mice after intracerebral inoculation with lymphocytic choriomeningitis virus (LCMV) or vesicular stomatitis virus (VSV), respectively. Survival of Usp18(-/-) mice after intracerebral LCMV infection correlated with a severe inhibition of LCMV RNA replication and antigen expression in the brain and increased levels of protein ISGylation. Consistent with these findings, mouse embryonic fibroblasts (MEF) and bone marrow-derived macrophages from Usp18(-/-) mice showed restricted LCMV replication. Moreover, MEF from Usp18(-/-) mice showed enhanced interferon-mediated resistance to the cytopathic effect caused by VSV and Sindbis virus (SNV). This report provides the first direct evidence that the ISG15 protease UBP43 and possibly protein ISGylation have a role in innate immunity against viral infection.