Invertebrate RNA viruses are targets of the host RNA interference (RNAi) pathway, which limits virus infection by degrading viral RNA substrates. Several insect RNA viruses encode suppressor proteins to counteract this antiviral response. We recently demonstrated that the dsDNA virus Invertebrate iridescent virus 6 (IIV-6) induces an RNAi response in Drosophila. Here, we show that RNAi is suppressed in IIV-6-infected cells and we mapped RNAi suppressor activity to the viral protein 340R. Using biochemical assays, we reveal that 340R binds long dsRNA and prevents Dicer-2-mediated processing of long dsRNA into small interfering RNAs (siRNAs). We demonstrate that 340R additionally binds siRNAs and inhibits siRNA loading into the RNA-induced silencing complex. Finally, we show that 340R is able to rescue a Flock House virus replicon that lacks its viral suppressor of RNAi. Together, our findings indicate that, in analogy to RNA viruses, DNA viruses antagonize the antiviral RNAi response.