ADP-ribosylation is a common posttranslational modification that may have antiviral properties and impact innate immunity. To regulate this activity, macrodomain proteins enzymatically remove covalently attached ADP-ribose from protein targets. All members of the Coronavirinae, a subfamily of positive-sense RNA viruses, contain a highly conserved macrodomain within nonstructural protein 3 (nsp3). However, its function or targets during infection remain unknown. We identified several macrodomain mutations that greatly reduced nsp3’s de-ADP-ribosylation activity in vitro. Next, we created recombinant severe acute respiratory syndrome coronavirus (SARS-CoV) strains with these mutations. These mutations led to virus attenuation and a modest reduction of viral loads in infected mice, despite normal replication in cell culture. Further, macrodomain mutant virus elicited an early, enhanced interferon (IFN), interferon-stimulated gene (ISG), and proinflammatory cytokine response in mice and in a human bronchial epithelial cell line. Using a coinfection assay, we found that inclusion of mutant virus in the inoculum protected mice from an otherwise lethal SARS-CoV infection without reducing virus loads, indicating that the changes in innate immune response were physiologically significant. In conclusion, we have established a novel function for the SARS-CoV macrodomain that implicates ADP-ribose in the regulation of the innate immune response and helps to demonstrate why this domain is conserved in CoVs.