Porcine epidemic diarrhea virus (PEDV) is the cause of an economically important swine disease. Previous studies suggested that PEDV does not elicit a robust IFN response, but the mechanism(s) used to evade or block this innate immune response was not known. In this study, we found that PEDV infection blocked synthetic dsRNA-induced IFN-β production by interfering with the activation of interferon regulatory factor 3 (IRF3). We identified PEDV replicase encoded papain-like protease 2 (PLP2) as an IFN antagonist that depends on catalytic activity for its function. We show that levels of ubiquitinated proteins are reduced during PEDV infection and that PEDV PLP2 has deubiquitinase (DUB) activity that recognizes and processes both K-48 and K-63 linked polyubiquitin chains. Furthermore, we found that PEDV PLP2 strongly inhibits RIG-I- and STING-activated IFN expression and that PEDV PLP2 can be co-immunoprecipitated with and deubiquitinates RIG-I and STING, the key components of the signalling pathway for IFN expression. These results show that PEDV infection suppresses production of IFN-β and provides evidence indicating that the PEDV papain-like protease 2 acts as a viral DUB to interfere with the RIG-I- and STING-mediated signalling pathway.