Type I interferons (IFNs) function as the first line of defense against viral infections by modulating cell growth, establishing an antiviral state and influencing the activation of various immune cells. Viruses such as influenza have developed mechanisms to evade this defense mechanism and during infection with influenza A viruses, the non-structural protein 1 (NS1) encoded by the virus genome suppresses induction of IFNs-α/β. Here we show that expression of avian H5N1 NS1 in HeLa cells leads to a block in IFN signaling. H5N1 NS1 reduces IFN-inducible tyrosine phosphorylation of STAT1, STAT2 and STAT3 and inhibits the nuclear translocation of phospho-STAT2 and the formation of IFN-inducible STAT1:1-, STAT1:3- and STAT3:3- DNA complexes. Inhibition of IFN-inducible STAT signaling by NS1 in HeLa cells is, in part, a consequence of NS1-mediated inhibition of expression of the IFN receptor subunit, IFNAR1. In support of this NS1-mediated inhibition, we observed a reduction in expression of ifnar1 in ex vivo human non-tumor lung tissues infected with H5N1 and H1N1 viruses. Moreover, H1N1 and H5N1 virus infection of human monocyte-derived macrophages led to inhibition of both ifnar1 and ifnar2 expression. In addition, NS1 expression induces up-regulation of the JAK/STAT inhibitors, SOCS1 and SOCS3. By contrast, treatment of ex vivo human lung tissues with IFN-α results in the up-regulation of a number of IFN-stimulated genes and inhibits both H5N1 and H1N1 virus replication. The data suggest that NS1 can directly interfere with IFN signaling to enhance viral replication, but that treatment with IFN can nevertheless override these inhibitory effects to block H5N1 and H1N1 virus infections.