Interferons confer cells resistant to retrovirus infection by inducing anti-viral cellular factors, such as tetherin, APOBEC3G, and Mx2. It is believed that many factors inhibiting viral infections among interferon-stimulated genes (ISGs) remain to be identified.  On the other hand, we found efficient restriction of retrovirus infection by a compound that inhibits S-S bond formation at acidic pH. Thus, it was postulated that an acidic endosome-localized, S-S bond digesting factor among ISGs may restrict retrovirus replication. We here report for the first time that such a cellular factor efficiently inhibits MLV and HIV-1 replication. When the factor was expressed in target cells, transduction efficiency of HIV-1 vector pseudotyped with ecotropic, amphotropic, xenotropic MLV, or VSV was significantly reduced.  In addition, when HIV-1 vector-producing cells were transfected with the factor, HIV-1 Gag expression and virion production were significantly suppressed. The factor digested S-S bonds of viral envelope proteins and of CD63, which is involved in HIV-1 virion release. A CD63 mutant containing amino acid substitutions at conserved cysteine residues in the second extracellular loop suppressed virion release like GILT. Interferon treatment induced the factor expression, and its knockdown by shRNA abrogated interferon-induced inhibition of HIV-1 vector infection. These results indicate that interferon restricts HIV-1 entry and production at endosomal level by inducing the factor.