The RNase activity of the envelope glycoprotein E(rns) of the pestivirus bovine viral diarrhea virus (BVDV) is required to block type I interferon (IFN) synthesis induced by single-stranded RNA (ssRNA) and double-stranded RNA (dsRNA) in bovine cells. Due to the presence of an unusual membrane anchor at its C terminus, a significant portion of E(rns) is also secreted. In addition, a binding site for cell surface glycosaminoglycans is located within the C-terminal region of E(rns). Here, we show that the activity of soluble E(rns) as an IFN antagonist is not restricted to bovine cells. Extracellularly applied E(rns) protein bound to cell surface glycosaminoglycans and was internalized into the cells within 1 h of incubation by an energy-dependent mechanism that could be blocked by inhibitors of clathrin-dependent endocytosis. E(rns) mutants that lacked the C-terminal membrane anchor retained RNase activity but lost most of their intracellular activity as an IFN antagonist. Surprisingly, once taken up into the cells, E(rns) remained active and blocked dsRNA-induced IFN synthesis for several days. Thus, we propose that E(rns) acts as an enzymatically active decoy receptor that degrades extracellularly added viral RNA mainly in endolysosomal compartments that might otherwise activate intracellular pattern recognition receptors (PRRs) in order to maintain a state of innate immunotolerance. The pestiviral RNase E(rns) was previously shown to inhibit viral ssRNA- and dsRNA-induced interferon (IFN) synthesis. However, the localization of E(rns) at or inside the cells, its species specificity, and its mechanism of interaction with cell membranes in order to block the host's innate immune response are still largely unknown. Here, we provide strong evidence that the pestiviral RNase E(rns) is taken up within minutes by clathrin-mediated endocytosis and that this uptake is mostly dependent on the glycosaminoglycan binding site located within the C-terminal end of the protein. Remarkably, the inhibitory activity of E(rns) remains for several days, indicating the very potent and prolonged effect of a viral IFN antagonist. This novel mechanism of an enzymatically active decoy receptor that degrades a major viral pathogen-associated molecular pattern (PAMP) might be required to efficiently maintain innate and, thus, also adaptive immunotolerance, and it might well be relevant beyond the bovine species.