West Nile virus is an emerging virus whose virulence is dependent upon viral evasion of IFN and innate immune defenses. The actions of IFN-stimulated genes (ISGs) impart control of virus infection, but the specific ISGs and regulatory pathways that restrict West Nile virus (WNV) are not defined. Here we show that inhibitor of κB kinase ε (IKKε) phosphorylation of STAT1 at serine 708 (Ser-708) drives IFIT2 expression to mediate anti-WNV effector function of IFN. WNV infection was enhanced in cells from IKKε(-/-) or IFIT2(-/-) mice. In IKKε(-/-) cells, the loss of IFN-induced IFIT2 expression was linked to lack of STAT1 phosphorylation on Ser-708 but not Tyr-701 nor Ser-727. STAT1 Ser-708 phosphorylation occurs independently of IRF-3 but requires signaling through the IFN-α/β receptor as a late event in the IFN-induced innate immune response that coincides with IKKε-responsive ISGs expression. Biochemical analyses show that STAT1 tyrosine dephosphorylation and CRM1-mediated STAT1 nuclear-cytoplasmic shuttling are required for STAT1 Ser-708 phosphorylation. When compared with WT mice, WNV-infected IKKε(-/-) mice exhibit enhanced kinetics of virus dissemination and increased pathogenesis concomitant with loss of STAT1 Ser-708 phosphorylation and IFIT2 expression. Our results define an IFN-induced IKKε signaling pathway of specific STAT1 phosphorylation and IFIT2 expression that imparts innate antiviral immunity to restrict WNV infection and control viral pathogenesis.