During viral infection, extracellular double stranded RNA (dsRNA) acts as a potent trigger of innate immunity via the production of type I interferons (IFNs). The detection of extracellular dsRNA involves different host cell sensors such as Toll-like receptor 3 (TLR3) and the RIG-I-like receptors (RLRs), RIG-I and MDA-5. TLR3 is located within endo-lysosomes, and is therefore well situated to detect dsRNA that has been taken up from the environment. Internalized dsRNA also activates the cytoplasmic RLRs, implying the existence of a mechanism to transport dsRNA across the endosomal membrane. Interestingly, the RLRs are functionally dominant over TLR-3 in the response to extracellular dsRNA and are critical for immunity to multiple viruses, but how dsRNA escapes from the endosome is unknown. Here we report that Sidt2, a mammalian ortholog of the C. elegans SID-1 dsRNA transporter, is present within the endosomal compartment and co-localizes with internalized poly(I:C), a synthetic dsRNA. Moreover, we generated Sidt2-deficient mice and found that loss of Sidt2 impairs the production of type I IFNs in response to extracellular poly(I:C) both in vitro and in vivo. This impairment in IFN production was not apparent when testing poly(A:U), a dsRNA ligand that activates only TLR-3 (and not the RLRs), and could be circumvented by delivering poly(I:C) with transfection reagents designed to facilitate endosomal escape. Together, these observations suggested a role for Sidt2 in transporting dsRNA from the endosome into the cytoplasm. In support of this, we subsequently found that loss of Sidt2 does not affect dsRNA internalization, but instead results in the accumulation of poly(I:C) within the endosomal compartment and a concomitant decrease in signaling events downstream of the RLRs. Finally, we show that Sidt2-deficient mice produce less type I IFNs and have increased mortality in response to infection with herpes simplex virus.  Taken together, our findings demonstrate a key role for Sidt2 in the endosomal escape of dsRNA and the subsequent induction of innate immunity.