IKKε is an IKK (inhibitor of nuclear factor κB kinase)-related kinase implicated in virus induction of interferon-β (IFNβ). We report that, although mice lacking IKKε produce normal amounts of IFNβ, they are hypersusceptible to viral infection because of a defect in the IFN signaling pathway. Specifically, a subset of type I IFN-stimulated genes are not activated in the absence of IKKε because the interferon-stimulated gene factor 3 complex (ISGF3) does not bind to promoter elements of the affected genes. We demonstrate that IKKε is activated by IFNβ and that IKKε directly phosphorylates signal transducer and activator of transcription 1 (STAT1), a component of ISGF3. We conclude that IKKε plays a critical role in the IFN-inducible antiviral transcriptional response.