The arenaviruses Lassa virus (LASV), Junín virus (JUNV), and Machupo virus (MACV) can cause severe and fatal diseases in humans. Although these pathogens are closely related, the host immune responses to these virus infections differ remarkably, with direct implications for viral pathogenesis. LASV infection is immunosuppressive, with a very low-level interferon response. In contrast, JUNV and MACV infections stimulate a robust interferon (IFN) response in a retinoic acid-inducible gene I (RIG-I)-dependent manner and readily activate protein kinase R (PKR), a known host double-stranded RNA (dsRNA) sensor. In response to infection with RNA viruses, host nonself RNA sensors recognize virus-derived dsRNA as danger signals and initiate innate immune responses. Arenavirus nucleoproteins (NPs) contain a highly conserved exoribonuclease (ExoN) motif, through which LASV NP has been shown to degrade virus-derived immunostimulatory dsRNA in biochemical assays. In this study, we for the first time present evidence that LASV restricts dsRNA accumulation during infection. Although JUNV and MACV NPs also have the ExoN motif, dsRNA readily accumulated in infected cells and often colocalized with dsRNA sensors. Moreover, LASV coinfection diminished the accumulation of dsRNA and the IFN response in JUNV-infected cells. The disruption of LASV NP ExoN with a mutation led to dsRNA accumulation and impaired LASV replication in minigenome systems. Importantly, both LASV NP and RNA polymerase L protein were required to diminish the accumulation of dsRNA and the IFN response in JUNV infection. For the first time, we discovered a collaboration between LASV NP ExoN and L protein in limiting dsRNA accumulation. Our new findings provide mechanistic insights into the differential host innate immune responses to highly pathogenic arenavirus infections.IMPORTANCE Arenavirus NPs contain a highly conserved DEDDh ExoN motif, through which LASV NP degrades virus-derived, immunostimulatory dsRNA in biochemical assays to eliminate the danger signal and inhibit the innate immune response. Nevertheless, the function of NP ExoN in arenavirus infection remains to be defined. In this study, we discovered that LASV potently restricts dsRNA accumulation during infection and minigenome replication. In contrast, although the NPs of JUNV and MACV also harbor the ExoN motif, dsRNA readily formed during JUNV and MACV infections, accompanied by IFN and PKR responses. Interestingly, LASV NP alone was not sufficient to limit dsRNA accumulation. Instead, both LASV NP and L protein were required to restrict immunostimulatory dsRNA accumulation. Our findings provide novel and important insights into the mechanism for the distinct innate immune response to these highly pathogenic arenaviruses and open new directions for future studies.