AbstractSoluble cytokine decoy receptors are potent immune modulatory reagents with therapeutic applications. Some virus-encoded secreted cytokine receptors interact with glycosaminoglycans expressed at the cell surface, but the biological significance of this activity in vivo is poorly understood. Here, we show the type I interferon binding protein (IFNα/βBP) encoded by vaccinia and ectromelia viruses requires of this cell binding activity to confer full virulence to these viruses and to retain immunomodulatory activity. Expression of a variant form of the IFNα/βBP that inhibits IFN activity, but does not interact with cell surface glycosaminoglycans, results in highly attenuated viruses with a virulence similar to that of the IFNα/βBP deletion mutant viruses. Transcriptomics analysis and infection of IFN receptor-deficient mice confirmed that the control of IFN activity is the main function of the IFNα/βBP in vivo. We propose that retention of secreted cytokine receptors at the cell surface may largely enhance their immunomodulatory activity.