Immune evasion of pathogens can modify the course of infection and impact viral persistence and pathology. Here, using different strains of the lymphocytic choriomeningitis virus (LCMV) model system, we show that slower propagation results in limited type I interferon (IFN-I) production and viral persistence. Specifically, cells infected with LCMV-Docile exhibited reduced viral replication when compared to LCMV-WE and as a consequence, infection with LCMV-Docile resulted in reduced activation of bone marrow derived dendritic cells (BMDCs) and IFN-I production in vitro in comparison with LCMV-WE. In vivo, we observed a reduction of IFN-I, T cell exhaustion and viral persistence following infection of LCMV-Docile but not LCMV-WE. Mechanistically, block of intracellular protein transport uncovered reduced propagation of LCMV-Docile when compared to LCMV-WE. This reduced propagation was critical in blunting the activation of the innate and adaptive immune system. When mice were simultaneously infected with LCMV-Docile and LCMV-WE, immune function was restored and IFN-I production, T cell effector functions as well as viral loads were similar to that of mice infected with LCMV-WE alone. Taken together, this study suggests that reduced viral propagation can result in immune evasion and viral persistence.