Severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) evades antiviral immunity through the expression of viral proteins that block detection, signaling, interferon (IFN) induction, and IFN-stimulated gene (ISG) expression. Weak induction of type I IFNs is associated with a hyperinflammatory response in patients that develop severe COVID-19. Here we uncover a role for cellular nucleic acid-binding protein (CNBP) in restricting SARS-CoV-2. Typically, CNBP resides in the cytosol and, in response to RNA sensing pathways, undergoes phosphorylation, nuclear translocation, and IFNβ enhancer DNA binding to turn on IFNβ gene transcription. In SARS-CoV-2-infected cells CNBP coordinates IFNβ gene transcription. In addition, CNBP binds SARS-CoV-2 viral RNA directly. CNBP competes with the nucleocapsid (N) protein and prevents viral RNA and nucleocapsid protein from undergoing liquid-liquid phase separation (LLPS) forming condensates critical for viral replication. Consequently, cells and animals lacking CNBP have higher viral loads and CNBP-deficient mice succumb rapidly to infection. Altogether, these findings identify CNBP as a key antiviral factor for SARS-CoV-2, functioning both as a regulator of antiviral IFN gene expression and a cell intrinsic restriction factor that disrupts LLPS to limit viral replication and spread.