Linear ubiquitination is a critical regulator of inflammatory signaling pathways. However, linearly ubiquitinated substrates and the biological significance of linear ubiquitination is incompletely understood. Here, we show that STAT1 has linear ubiquitination at Lys511 and Lys652 residues in intact cells, which inhibits STAT1 binding to the type-I interferon receptor IFNAR2, thereby restricting STAT1 activation and resulting in type-I interferon signaling homeostasis. Linear ubiquitination of STAT1 is removed rapidly by OTULIN upon type-I interferon stimulation, which facilitates activation of interferon-STAT1 signaling. Furthermore, viruses induce HOIP expression through the NF-κB pathway, which in turn increases linear ubiquitination of STAT1 and thereby inhibits interferon antiviral response. Consequently, HOIL-1L heterozygous mice have active STAT1 signaling and enhanced responses to type-I interferons. These findings demonstrate a linear ubiquitination-mediated switch between homeostasis and activation of type-I interferon signaling, and suggest potential strategies for clinical antiviral therapy.