Cellular mRNA of higher eukaryotes and many viral RNA are methylated at the N-7 and 2′-O positions of the 5′ guanosine cap by specific nuclear and cytoplasmic methyltransferases (MTases), respectively. Whereas N-7 methylation is essential for RNA translation and stability 1, the function of 2′-O methylation has remained uncertain since its discovery 35 years ago 2- 4. Here, we show that a West Nile virus (WNV) mutant (E218A) that lacks 2′-O MTase activity was attenuated in wild type primary cells and mice but was pathogenic in the absence of type I interferon (IFN) signaling. 2′-O methylation of viral RNA did not affect IFN induction in WNV-infected fibroblasts but instead modulated the antiviral effects of IFN-induced proteins with tetratricopeptide repeats (IFIT), which are interferon-stimulated genes (ISG) implicated in regulation of protein translation. Poxvirus and coronavirus mutants that lacked 2′-O MTase activity similarly showed enhanced sensitivity to the antiviral actions of IFN and specifically, IFIT proteins. Our results demonstrate that the 2′-O methylation of the 5′ cap of viral RNA functions to subvert innate host antiviral responses through escape of IFIT-mediated suppression, and suggest an evolutionary explanation for 2′-O methylation of cellular mRNA: to distinguish self from non-self RNA. Differential methylation of cytoplasmic RNA likely serves as a paradigm for pattern recognition and restriction of propagation of foreign viral RNA in host cells.