The secreted cytokine alpha/beta interferon (IFN-alpha/beta) binds its receptor to activate the Jak-STAT signal transduction pathway, leading to formation of the heterotrimeric IFN-stimulated gene factor 3 (ISGF3) transcription complex for induction of IFN-stimulated genes (ISGs) and establishment of an antiviral state. Many viruses have evolved countermeasures to inhibit the IFN pathway, thereby subverting the innate antiviral response. Here, we demonstrate that the mildly myocarditic reovirus type 1 Lang (T1L), but not the nonmyocarditic reovirus type 3 Dearing, represses IFN induction of a subset of ISGs and that this repressor function segregates with the T1L M1 gene. Concordantly, the T1L M1 gene product, mu2, dramatically inhibits IFN-beta-induced reporter gene expression. Surprisingly, T1L infection does not degrade components of the ISGF3 complex or interfere with STAT1 or STAT2 nuclear translocation as has been observed for other viruses. Instead, infection with T1L or reassortant or recombinant viruses containing the T1L M1 gene results in accumulation of interferon regulatory factor 9 (IRF9) in the nucleus. This effect has not been previously described for any virus and suggests that mu2 modulates IRF9 interactions with STATs for both ISGF3 function and nuclear export. The M1 gene is a determinant of virus strain-specific differences in the IFN response, which are linked to virus strain-specific differences in induction of murine myocarditis. We find that virus-induced myocarditis is associated with repression of IFN function, providing new insights into the pathophysiology of this disease. Together, these data provide the first report of an increase in IRF9 nuclear accumulation associated with viral subversion of the IFN response and couple virus strain-specific differences in IFN antagonism to the pathogenesis of viral myocarditis.