The transcription factor IRF7 (interferon regulatory factor 7) is a key regulator of type I interferon and plays essential roles in restricting virus infection and spread. IRF7 activation is tightly regulated to prevent excessive inflammation and autoimmunity; however, how IRF7 is suppressed by negative regulators remains poorly understood. Here, we have identified AIP (aryl hydrocarbon receptor interacting protein) as a new binding partner of IRF7. The interaction between AIP and IRF7 is enhanced upon virus infection, and AIP potently inhibits IRF7-induced type I IFN (IFNα/β) production. Overexpression of AIP blocks virus-induced activation of IFN, whereas knockdown of AIP by siRNA potentiates virally activated IFN production. Consistently, AIP-deficient murine embryonic fibroblasts are highly resistant to virus infection because of increased production of IFNα/β. AIP inhibits IRF7 function by antagonizing the nuclear localization of IRF7. Together, our study identifies AIP as a novel inhibitor of IRF7 and a negative regulator of innate antiviral signaling.