The interferon-regulated antiviral responses are essential for the induction of both innate and adaptive immunity in mammals. Production of virus-derived small-interfering RNAs (vsiRNAs) to restrict virus infection by RNA interference (RNAi) is a recently identified mammalian immune response to several RNA viruses, which cause important human diseases such as influenza and Zika virus. However, little is known about Dicer processing of viral double-stranded RNA replicative intermediates (dsRNA-vRIs) in mammalian somatic cells. Here we show that infected somatic cells produced more influenza vsiRNAs than cellular microRNAs when both were produced by human Dicer expressed de novo, indicating that dsRNA-vRIs are not poor Dicer substrates as previously proposed according to in vitro Dicer processing of synthetic long dsRNA. We report the first evidence both for canonical vsiRNA production during wild-type Nodamura virus infection and direct vsiRNA sequestration by its RNAi suppressor protein B2 in two strains of suckling mice. Moreover, Sindbis virus (SINV) accumulation in vivo was decreased by prior production of SINV-targeting vsiRNAs triggered by infection and increased by heterologous expression of B2 in cis from SINV genome, indicating an antiviral function for the induced RNAi response. These findings reveal that unlike artificial long dsRNA, dsRNA-vRIs made during authentic infection of mature somatic cells are efficiently processed by Dicer into vsiRNAs to direct antiviral RNAi. Interestingly, Dicer processing of dsRNA-vRIs into vsiRNAs was inhibited by LGP2 (laboratory of genetics and physiology 2), which was encoded by an interferon-stimulated gene (ISG) shown recently to inhibit Dicer processing of artificial long dsRNA in cell culture. Our work thus further suggests negative modulation of antiviral RNAi by a known ISG from the interferon response.