Severe acute respiratory syndrome coronavirus (SARS-CoV)-2 has caused millions of deaths since its emergence in 2019. Innate immune antagonism by lethal CoVs such as SARS-CoV-2 is crucial for optimal replication and pathogenesis. The conserved nonstructural protein 15 (nsp15) endoribonuclease (EndoU) limits activation of double-stranded (ds)RNA-induced pathways, including interferon (IFN) signaling, protein kinase R (PKR), and oligoadenylate synthetase/ribonuclease L (OAS/RNase L) during diverse CoV infections including murine coronavirus and Middle East respiratory syndrome (MERS)-CoV. To determine how nsp15 functions during SARS-CoV-2 infection, we constructed a recombinant SARS-CoV-2 (nsp15 ^mut ) expressing catalytically inactivated nsp15, which we show promoted increased dsRNA accumulation. Infection with SARS-CoV-2 nsp15 ^mut led to increased activation of the IFN signaling and PKR pathways in lung-derived epithelial cell lines and primary nasal epithelial air–liquid interface (ALI) cultures as well as significant attenuation of replication in ALI cultures compared to wild-type virus. This replication defect was rescued when IFN signaling was inhibited with the Janus activated kinase (JAK) inhibitor ruxolitinib. Finally, to assess nsp15 function in the context of minimal (MERS-CoV) or moderate (SARS-CoV-2) innate immune induction, we compared infections with SARS-CoV-2 nsp15 ^mut and previously described MERS-CoV nsp15 mutants. Inactivation of nsp15 had a more dramatic impact on MERS-CoV replication than SARS-CoV-2 in both Calu3 cells and nasal ALI cultures suggesting that SARS-CoV-2 can better tolerate innate immune responses. Taken together, SARS-CoV-2 nsp15 is a potent inhibitor of dsRNA-induced innate immune response and its antagonism of IFN signaling is necessary for optimal viral replication in primary nasal ALI cultures.