Influenza is a highly infectious disease characterized by recurrent annual epidemics and unpredictable major worldwide pandemics. Rapid spread of the highly pathogenic avian H5N1 strain and escalating human infections by the virus have set off the alarm for a global pandemic. To provide an urgently needed alternative treatment modality for influenza, we have generated a recombinant fusion protein composed of a sialidase catalytic domain derived from Actinomyces viscosus fused with a cell surface-anchoring sequence. The sialidase fusion protein is to be applied topically as an inhalant to remove the influenza viral receptors, sialic acids, from the airway epithelium. We demonstrate that a sialidase fusion construct, DAS181, effectively cleaves sialic acid receptors used by both human and avian influenza viruses. The treatment provides long-lasting effect and is nontoxic to the cells. DAS181 demonstrated potent antiviral and cell protective efficacies against a panel of laboratory strains and clinical isolates of IFV A and IFV B, with virus replication inhibition 50% effective concentrations in the range of 0.04 to 0.9 nM. Mouse and ferret studies confirmed significant in vivo efficacy of the sialidase fusion in both prophylactic and treatment modes.