The outcome of a viral infection is regulated in part by the complex coordination of viral and host interactions that compete for the control and optimization of virus replication. Severe acute respiratory syndrome coronavirus (SARS-CoV) intimately engages and regulates the host innate immune responses during infection. Using a novel interferon (IFN) antagonism screen, we show that the SARS-CoV proteome contains several replicase, structural, and accessory proteins that antagonize the IFN pathway. In this study, we focus on the SARS-CoV papain-like protease (PLP), which engages and antagonizes the IFN induction and NF-kappaB signaling pathways. PLP blocks these pathways by affecting activation of the important signaling proteins in each pathway, IRF3 and NF-kappaB. We also show that the ubiquitin-like domain of PLP is necessary for pathway antagonism but not sufficient by itself to block these pathways regardless of the enzymatic activity of the protease. The potential mechanism of PLP antagonism and its role in pathogenesis are discussed.