Betanodavirus B2 belongs to a group of functionally related proteins from the sense-strand RNA virus family Nodaviridae that suppress cellular RNA interference. The B2 proteins of insect alphanodaviruses block RNA interference by binding to double-stranded RNA (dsRNA), thus preventing Dicer-mediated cleavage and the subsequent generation of short interfering RNAs. We show here that the fish betanodavirus B2 protein also binds dsRNA. Binding is sequence independent, and maximal binding occurs with dsRNA substrates greater than 20 bp in length. The binding of B2 to long dsRNA is sufficient to completely block Dicer cleavage of dsRNA in vitro. Protein-protein interaction studies indicated that B2 interacts with itself and with other dsRNA binding proteins, the interaction occurring through binding to shared dsRNA substrates. Induction of the dsRNA-dependent interferon response was not antagonized by B2, as the interferon-responsive Mx gene of permissive fish cells was induced by wild-type viral RNA1 but not by a B2 mutant. The induction of Mx instead relied solely on viral RNA1 accumulation, which is impaired in the B2 mutant. Hyperediting of virus dsRNA and site-specific editing of 5-HT2C mRNA were both antagonized by B2. RNA editing was not, however, observed in transfected wild-type or B2 mutant RNA1, suggesting that this pathway does not contribute to the RNA1 accumulation defect of the B2 mutant. We thus conclude that betanodavirus B2 is a dsRNA binding protein that sequesters and protects both long and short dsRNAs to protect betanodavirus from cellular RNA interference