CpG dinucleotides are suppressed in most vertebrate RNA viruses, including HIV-1, and introducing CpGs into RNA virus genomes inhibits their replication. The zinc finger antiviral protein (ZAP) binds regions of viral RNA containing CpGs and targets them for degradation. ZAP does not have enzymatic activity and recruits other cellular proteins to inhibit viral replication. We found that KHNYN, a protein with no previously known function, interacts with ZAP. KHNYN overexpression selectively inhibits HIV-1 containing clustered CpG dinucleotides and this requires ZAP and its cofactor TRIM25. KHNYN requires both its KH-like domain and NYN endonuclease domain for antiviral activity. Crucially, depletion of KHNYN eliminated the deleterious effect of CpG dinucleotides on HIV-1 RNA abundance and infectious virus production and also enhanced the production of murine leukemia virus. Overall, we have identified KHNYN as a novel cofactor for ZAP to target CpG-containing retroviral RNA for degradation.