Reovirus is the first naturally occurring human virus reported to exploit activated Ras signaling in the host cell for infection, and is currently undergoing clinical trials as a cancer therapeutic. Recent evidence suggests that Ras transformation promotes three reoviral replication steps during the first round of infection: uncoating of the incoming virion, generation of progeny viruses with enhanced infectivity, and virus release through enhanced apoptosis. Whether oncogenic Ras also enhances reovirus spread in subsequent rounds of infection through other mechanisms has not been examined. Here, we show that compared with nontransformed cells, Ras-transformed cells are severely compromised not only in their response to IFN-beta, but also in the induction of IFN-beta mRNA following reovirus infection. Defects in both IFN-beta production and response allow for efficient virus spread in Ras-transformed cells. We show that the MEK/ERK pathway downstream of Ras is responsible for inhibiting IFN-beta expression by blocking signaling from the retinoic acid-inducible gene I (RIG-I) which recognizes viral RNAs. Overexpression of wild-type RIG-I restores INF-beta expression in reovirus-infected Ras-transformed cells. In vitro-synthesized viral mRNAs also invoke robust RIG-I-mediated IFN-beta production in transfected nontransformed cells, but not in Ras-transformed cells. Collectively, our data suggest that oncogenic Ras promotes virus spread by suppressing viral RNA-induced IFN-beta production through negative regulation of RIG-I signaling.