SARS-CoV-2 encodes numerous virulence factors, yet their precise mechanisms of action remain unknown. We provide evidence that the SARS-CoV-2 non-structural protein 15 (nsp15) enhances viral virulence by suppressing the production of viral double-stranded (dsRNA), a potent inducer of antiviral signaling. The viral variants lacking nsp15 endoribonuclease (EndoU) activity elicited higher innate immune responses and exhibited reduced replication in human stem cell-derived lung type II alveolar epithelial cells, as well as in the lungs of infected hamsters. Consistent with these findings, the catalytically inactive EndoU mutants caused significantly less mortality compared to the wild-type virus in K18-hACE2 mice. Mechanistically, the cells infected with EndoU mutants accumulated more viral double-stranded RNA, causing enhanced stimulation of antiviral pathways. The depletion of proteins involved in viral RNA sensing dampened immune responses to EndoU mutants. These findings indicate that the nsp15 EndoU activity contributes to viral virulence by antagonizing the host antiviral defense mechanisms.