The interferon (IFN) system represents the first line of defense against a wide range of viruses. Virus infection rapidly triggers the transcriptional induction of IFN-β and IFN Stimulated Genes (ISGs), whose protein products act as viral restriction factors by interfering with specific stages of virus life cycle, such as entry, transcription, translation, genome replication, assembly and egress. Here, we report a new mode of action of an ISG, IFN-induced TDRD7 (tudor domain containing 7) inhibited paramyxovirus replication by inhibiting autophagy. TDRD7 was identified as an antiviral gene by a high throughput screen of an ISG shRNA library for blocking IFN’s protective effect against Sendai virus (SeV) replication. The antiviral activity of TDRD7 against SeV, human parainfluenza virus 3 and respiratory syncytial virus was confirmed by its genetic ablation or ectopic expression in several types of mouse and human cells. TDRD7’s antiviral action was mediated by its ability to inhibit autophagy, a cellular catabolic process which was robustly induced by SeV infection and required for its replication. Mechanistic investigation revealed that TDRD7 interfered with the activation of AMP-dependent kinase (AMPK), an enzyme required for initiating autophagy. AMPK activity was required for efficient replication of several paramyxoviruses, as demonstrated by its genetic ablation or inhibition of its activity by TDRD7 or chemical inhibitors. Therefore, our study has identified a new antiviral ISG with a new mode of action. The antiviral functions of interferons (IFNs) are mediated by the IFN-induced proteins, encoded by the IFN Stimulated Genes (ISGs). Because ISGs are virus-specific, we performed a high throughput genetic screen to identify novel antiviral ISGs against Sendai virus (SeV), a respirovirus of the Paramyxoviridae family. Our screen isolated a small subset of anti-SeV ISGs, among which we focused on a novel ISG, Tudor domain containing 7 (TDRD7). The antiviral activity of TDRD7 was confirmed by genetic ablation of the endogenous, and the ectopic expression of the exogenous, TDRD7 in human and mouse cell types. Investigation of the mechanism of antiviral action revealed that TDRD7 inhibited ‘virus-induced autophagy’, which was required for the replication of SeV. Autophagy, a cellular catabolic process, was robustly induced by SeV infection, and was inhibited by TDRD7. TDRD7 interfered with the ‘induction’ step of autophagy by inhibiting the activation of AMP-dependent Kinase (AMPK). AMPK is a multifunctional metabolic kinase, which was activated by SeV infection, and its activity was required for virus replication. Genetic ablation and inhibition of AMPK activity by physiological (TDRD7) or chemical (Compound C) inhibitors strongly attenuated SeV replication. The anti-AMPK activity of TDRD7 was capable of inhibiting other members of Paramyxoviridae family, human parainfluenza virus type 3 and respiratory syncytial virus. Therefore, our study uncovered a new antiviral mechanism of IFN by inhibiting the activation of autophagy-inducing kinase AMPK.