The La (SS-B) autoimmune antigen is an RNA-binding protein that is present in both nucleus and cytoplasm of eukaryotic cells. The spectrum of RNAs that interact with the La antigen includes species which also bind to the interferon-inducible protein kinase PKR. We have investigated whether the La antigen can regulate the activity of PKR and have observed that both the autophosphorylation of the protein kinase that accompanies its activation by dsRNA and the dsRNA-dependent phosphorylation of the alpha subunit of polypeptide chain initiation factor eIF-2 by PKR are inhibited in the presence of recombinant La antigen. This inhibition is partially relieved at higher concentrations of dsRNA. Once activated by dsRNA the protein kinase activity of PKR is insensitive to the La antigen. We have demonstrated by a filter binding assay that La is a dsRNA binding protein. Furthermore, when recombinant La is incubated with a 900 bp synthetic dsRNA or with naturally occurring reovirus dsRNA it converts these substrates to single-stranded forms. We conclude that the La antigen inhibits the dsRNA-dependent activation of PKR by binding and unwinding dsRNA and that it may therefore play a role in the regulation of this protein kinase in interferon-treated or virus-infected cells.