Bacteria and archaea use diverse defense systems to defeat their viruses, and in turn, viruses develop anti-defense strategies to overcome the host immunity. Catalytically inactive prokaryotic Argonaute proteins constitute a family of defense systems that kill infected cells to halt viral propagation, whereas how viruses escape the pAgo (prokaryotic Argonaute) immunity remains unknown. Here, we demonstrate that an archaeal chronic virus SMV1a can evade the immunity of Saccharolobus islandicus Argonaute (SiAgo) system through early progeny release. Prompt expression of virion proteins post-infection may facilitate the early progeny release. Further, we evolved SMV1a to overcome SiAgo immunity and identified that the insertion of a repeat element drives SMV1a resistance to the SiAgo immunity at the cost of inefficient progeny production in SiAgo-deficient cells. The inserted repeat is rapidly lost when the evolved SMV1a is replicated in SiAgo-deficient cells, and efficient progeny production can be restored. The data suggest that the reversible repeat insertion adapts SMV1a to hosts with different immune backgrounds. Together, our data provide new insights into the anti-defense mechanisms of an archaeal chronic virus.