The type I interferons (IFNs) are potent mediators of antiviral immunity, and many viruses have developed means to block their expression or their effects. Semliki Forest virus (SFV) infection induces rapid and profound silencing of host cell gene expression, a process believed to be important for the inhibition of the IFN response. In SFV-infected cells, a large proportion of the nonstructural protein nsp2 is found in the nucleus, but a role for this localization has not been described. In this work we demonstrate that a viral mutant, SFV4-RDR, in which the nuclear localization sequence of nsp2 has been rendered inactive, induces a significantly more robust IFN response in infected cells. This mutant virus replicates at a rate similar to that of the parental SFV4 strain and also shuts off host cell gene expression to similar levels, indicating that the general cellular shutoff is not responsible for the inhibition of IFN expression. Further, the rate of virus-induced nuclear translocation of early IFN transcription factors was not found to differ between the wild-type and mutant viruses, indicating that the effect of nsp2 is at a later stage. These results provide novel information about the mode of action of this viral IFN antagonist.