Porcine epidemic diarrhea virus (PEDV) is a highly pathogenic porcine enteropathogenic coronavirus causing severe enteritis and lethal watery diarrhea in piglets. PEDV infection suppresses the synthesis of type I IFN, and multiple viral proteins of PEDV have been shown to target the adaptors of innate immune pathways to inhibit type I IFN production. In this study, we identified PEDV membrane (M) protein as a new antagonist of type I IFN production in both human embryonic kidney HEK293T cells and porcine kidney PK-15 cells and determined the antagonistic mechanism used by M protein to target IFN regulatory factor 7 (IRF7), an important regulator of type I IFN production. IRF7 is phosphorylated and activated by TBK1 and IKKε in response to viral infection. We found that PEDV M protein interacted with the inhibitory domain of IRF7 and significantly suppressed TBK1/IKKε-induced IRF7 phosphorylation and dimerization of IRF7, leading to the decreased expression of type I IFN, although it did not affect the interaction between TBK1/IKKε and IRF7. As expected, overexpression of M protein significantly increased PEDV replication in porcine cells. The M proteins of both epidemic PEDV strains and vaccine strain showed similar antagonistic effect on type I IFN production, and the 1-55 region of M protein was essential for disruption of IRF7 function by interacting with IRF7. Taken together, our data identified a new, to our knowledge, IFN antagonist of PEDV, as well as a novel, to our knowledge, antagonistic mechanism evolved by PEDV to inhibit type I IFN production.