Interferon (IFN)-stimulated gene 15 (ISG15) is one of several proteins induced by conceptus-derived Type I or II IFNs in the uterus, and is implicated as an important factor in determining uterine receptivity to embryos in ruminants. But little is known about the role the ISG15 gene or gene product plays during embryo development. In the present study, both the expression profile and function of ISG15 were investigated in early bovine embryos in vitro. ISG15 mRNA was detectable in Day 0, 2, 6 and 8 bovine embryos, but IFN-τ (IFNT) mRNA only appeared from Day 6. This means that embryonic expression of ISG15 on Days 0 and 2 was not induced by embryonic IFNT. However, ISG15 mRNA expression paralleled the expression of IFNT mRNA in Day 6 and 8 embryos. ISG15–lentivirus interference plasmid (ISG15i) was injected into 2-cell embryos to knockdown ISG15 expression. This resulted in decreases in the proportion of hatching blastocysts, the diameter of blastocysts and cell number per diameter of blastocysts compared with control embryos. In addition, ISG15i inhibited IFNT, Ets2 (E26 oncogene homolog 2) mRNA and connexion 43 protein expression in Day 8 blastocysts, whereas exogenous IFNT treatment (100 ng mL–1, from Day 4 to Day 8) improved ISG15 mRNA and connexion 43 protein expression. In conclusion, it appears that ISG15 is involved in early bovine embryo development and that it regulates IFNT expression in the blastocyst.