Natural killer (NK) cells play an important role in early defense against viral infection. The cytotoxic activity of NK cells is increased by interferon‐α/β (IFN‐α/β), produceden masse in virally infected cells. However, the mechanism(s) by which IFN‐α/β contribute to the NK‐cell‐mediated antiviral response is not well understood. Here we provide evidence that the cytotoxicity of NK cells is enhanced by IFN‐α/β through induction of TNF‐related apoptosis‐inducing ligand (TRAIL). Isolation and analysis of the murine TRAIL promoter revealed the presence of an IFN‐stimulated response element (ISRE), which binds to the transcription factor ISGF3 (interferon stimulated gene factor‐3). This promoter is indeed activated by IFN‐β in ISGF3‐dependent manner. We also show that virally infected cells, but not uninfected cells, are susceptible to TRAIL‐mediated cytotoxicity in vitro, and that the TRAIL expressed in NK cells is indeed crucial in limiting virus replication in vivo. Thus, our study reveals a new molecular link between IFN‐α/β signaling and activation of NK cells in antiviral response of the host.