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Emerging data suggest that induction of viral mimicry responses through activation of double-stranded RNA (dsRNA) sensors in cancer cells is a promising therapeutic strategy. One approach to induce viral mimicry is to target molecular regulators of dsRNA sensing pathways. Here, we show that the exoribonuclease XRN1 is a negative regulator of the dsRNA sensor protein kinase R (PKR) in cancer cells with high interferon-stimulated gene (ISG) expression. deletion causes PKR activation and consequent cancer cell lethality. Disruption of interferon signaling with the JAK1/2 inhibitor ruxolitinib can decrease cellular PKR levels and rescue sensitivity to deletion. Conversely, interferon-β stimulation can increase PKR levels and induce sensitivity to inactivation. Lastly, deletion causes accumulation of endogenous complementary sense/anti-sense RNAs, which may represent candidate PKR ligands. Our data demonstrate how XRN1 regulates PKR and nominate XRN1 as a potential therapeutic target in cancer cells with an activated interferon cell state.