Feline infectious peritonitis (FIP), caused by virulent feline coronavirus, is the leading infectious cause of death in cats. The type I interferon (type I IFN)-mediated immune responses provide host protection from infectious diseases. Several coronaviruses have been reported to evolve diverse strategies to evade host IFN response. However, whether feline infectious peritonitis virus (FIPV) antagonizes the type I IFN signaling remains unclear. In this study, we demonstrated that FIPV strain DF2 infection not only failed to induce interferon-β (IFN-β) and interferon-stimulated gene (ISG) production, but also inhibited Sendai virus (SEV) or polyinosinic-polycytidylic acid (poly(I:C))-induced IFN-β production. Subsequently, we found that one of the non-structural proteins encoded by the FIPV genome, nsp5, interrupted type I IFN signaling in a protease-dependent manner by cleaving the nuclear factor κB (NF-κB) essential modulator (NEMO) at three sites—glutamine132 (Q132), Q205, and Q231. Further investigation revealed that the cleavage products of NEMO lost the ability to activate the IFN-β promoter. Mechanistically, the nsp5-mediated NEMO cleavage disrupted the recruitment of the TRAF family member-associated NF-κB activator (TANK) to NEMO, which reduced the phosphorylation of interferon regulatory factor 3 (IRF3), leading to the inhibition of type I IFN production. Our research provides new insights into the mechanism for FIPV to counteract host innate immune response.