A phosphodiesterase characterized by a generally higher activity on 2'-5' than on 3'-5' phosphodiester bonds was isolated from mouse L cells treated with interferon. A similar enzyme was purified from mouse reticulocytes. The phosphodiesterase 2'-PDi splits the 2'-phosphate bond of pppA2'p5'A2'p5'A, the oligonucleotide activator of ribonuclease F. The level of phosphodiesterase 2'-PDi is increased by interferon treatment of L cells. The phosphodiesterase was also shown to degrade the C-C-A terminus of tRNA and to reduce the amino acid acceptance of tRNA in cell-free extracts, thereby causing a tRNA-reversible inhibition of mRNA translation.