The 5′ cap structures of higher eukaryote mRNAs have ribose 2′-O-methylation. Likewise, many viruses that replicate in the cytoplasm of eukaryotes have evolved 2′-O-methyltransferases to autonomously modify their mRNAs. However, a defined biological role for 2′-O-methylation of mRNA remains elusive. Here we show that 2′-O-methylation of viral mRNA was critically involved in subverting the induction of type I interferon. We demonstrate that human and mouse coronavirus mutants lacking 2′-O-methyltransferase activity induced higher expression of type I interferon and were highly sensitive to type I interferon. Notably, the induction of type I interferon by viruses deficient in 2′-O-methyltransferase was dependent on the cytoplasmic RNA sensor Mda5. This link between Mda5-mediated sensing of viral RNA and 2′-O-methylation of mRNA suggests that RNA modifications such as 2′-O-methylation provide a molecular signature for the discrimination of self and non-self mRNA.