CD30 is up-regulated in several human diseases and viral infections but its role in immune regulation is poorly understood. Here, we report the expression of a functional soluble CD30 homologue, viral CD30 (vCD30), encoded by ectromelia (mousepox) virus, a poxvirus that causes a severe disease related to human smallpox. We show that vCD30 is a 12-kD secreted protein that not only binds CD30L with high affinity and prevents its interaction with CD30, but it also induces reverse signaling in cells expressing CD30L. vCD30 blocked the generation of interferon γ–producing cells in vitro and was a potent inhibitor of T helper cell (Th)1- but not Th2-mediated inflammation in vivo. The finding of a CD30 homologue encoded by ectromelia virus suggests a role for CD30 in antiviral defense. Characterization of the immunological properties of vCD30 has uncovered a role of CD30–CD30L interactions in the generation of inflammatory responses.