Interferons (IFN) are essential antiviral cytokines that establish the cellular antiviral state through upregulation of hundreds of interferon-stimulated genes (ISGs), most of which have uncharacterized functions and mechanisms. We identified cholesterol-25-hydroxylase (CH25H) as a broadly antiviral ISG. CH25H converts cholesterol to a soluble antiviral factor, 25-hydroxycholesterol (25HC). 25HC treatment in cultured cells broadly inhibited growth of enveloped viruses including VSV, HSV, HIV, and MHV68 and acutely pathogenic EBOV, RVFV, RSSEV, and Nipah viruses under BSL4 conditions. It suppressed viral growth by blocking membrane fusion between virus and cell. In animal models, Ch25h-deficient mice were more susceptible to MHV68 lytic infection. Moreover, administration of 25HC in humanized mice suppressed HIV replication and reversed T cell depletion. Thus, our studies demonstrate a unique mechanism by which IFN achieves its antiviral state through the production of a natural oxysterol to inhibit viral entry and implicate membrane-modifying oxysterols as potential antiviral therapeutics.