Mitochondria are descendants of endosymbiotic bacteria and retain essential prokaryotic features such as a compact circular genome. Consequently, in mammals, mitochondrial DNA is subjected to bidirectional transcription that generates overlapping transcripts, which are capable of forming long double-stranded RNA structures1,2. However, to our knowledge, mitochondrial double-stranded RNA has not been previously characterized in vivo. Here we describe the presence of a highly unstable native mitochondrial double-stranded RNA species at single-cell level and identify key roles for the degradosome components mitochondrial RNA helicase SUV3 and polynucleotide phosphorylase PNPase in restricting the levels of mitochondrial double-stranded RNA. Loss of either enzyme results in massive accumulation of mitochondrial double-stranded RNA that escapes into the cytoplasm in a PNPase-dependent manner. This process engages an MDA5-driven antiviral signalling pathway that triggers a type I interferon response. Consistent with these data, patients carrying hypomorphic mutations in the gene PNPT1, which encodes PNPase, display mitochondrial double-stranded RNA accumulation coupled with upregulation of interferon-stimulated genes and other markers of immune activation. The localization of PNPase to the mitochondrial inter-membrane space and matrix suggests that it has a dual role in preventing the formation and release of mitochondrial double-stranded RNA into the cytoplasm. This in turn prevents the activation of potent innate immune defence mechanisms that have evolved to protect vertebrates against microbial and viral attack.