Polyomavirus JC (JCPyV) causes the demyelinating disease progressive multifocal leukoencephalopathy (PML). JCPyV infection is very common in childhood and, under conditions of severe immunosuppression, JCPyV may reactivate to cause PML. JC viral proteins expression is regulated by the JCPyV non-coding control region (NCCR), which contains binding sites for cellular transcriptional factors which regulate JCPyV transcription. Our earlier studies suggest that JCPyV reactivation occurs within glial cells due to cytokines such as TNF-α which stimulate viral gene expression. In this study, we examined interferon-α (IFNα) or β (IFNβ) which have a negative effect on JCPyV transcriptional regulation. We also showed that these interferons induce the endogenous liver inhibitory protein (LIP), an isoform of CAAT/enhancer binding protein beta (C/EBPβ). Treatment of glial cell line with interferons increases the endogenous level of C/EBPβ-LIP. Furthermore, we showed that the negative regulatory role of the interferons in JCPyV early and late transcription and viral replication is more pronounced in the presence of C/EBPβ-LIP. Knockdown of C/EBPβ-LIP by shRNA reverse the inhibitory effect on JCPyV viral replication. Therefore, IFNα and IFNβ negatively regulate JCPyV through induction of C/EBPβ-LIP, which together with other cellular transcriptional factors may control the balance between JCPyV latency and activation.