Influenza viruses continue to pose a major public health threat worldwide and options for antiviral therapy are limited by the emergence of drug-resistant virus strains. The antiviral cytokine, interferon (IFN) is an essential mediator of the innate immune response and influenza viruses, like many viruses, have evolved strategies to evade this response, resulting in increased replication and enhanced pathogenicity. A cell-based assay that monitors IFN production was developed and applied in a high-throughput compound screen to identify molecules that restore the IFN response to influenza virus infected cells. We report the identification of compound ASN2, which induces IFN only in the presence of influenza virus infection. ASN2 preferentially inhibits the growth of influenza A viruses, including the 1918 H1N1, 1968 H3N2 and 2009 H1N1 pandemic strains and avian H5N1 virus. In vivo, ASN2 partially protects mice challenged with a lethal dose of influenza A virus. Surprisingly, we found that the antiviral activity of ASN2 is not dependent on IFN production and signaling. Rather, its IFN-inducing property appears to be an indirect effect resulting from ASN2-mediated inhibition of viral polymerase function, and subsequent loss of the expression of the viral IFN antagonist, NS1. Moreover, we identified a single amino acid mutation at position 499 of the influenza virus PB1 protein that confers resistance to ASN2, suggesting that PB1 is the direct target. This two-pronged antiviral mechanism, consisting of direct inhibition of virus replication and simultaneous activation of the host innate immune response, is a unique property not previously described for any single antiviral molecule.