Initially reported for viral RNA, elongation of polypeptide chains beyond the stop codon - translational readthrough (TR) - also occurs on eukaryotic transcripts. TR diversifies the proteome and can modulate protein levels. Here we report that AGO1x, an evolutionarily conserved TR isoform of Argonaute 1, is generated in highly proliferative breast cancer cells, where it curbs accumulation of double stranded RNAs, and consequent induction of the interferon response and apoptosis. In contrast to other mammalian Argonaute protein family members with primarily cytoplasmic functions, AGO1x localizes to the nucleus, in the vicinity of nucleoli. We identify a novel interaction of AGO1x with the Polyribonucleotide Nucleotidyltransferase 1, and show that the depletion of this protein further augments the dsRNA accumulation. Our study thus uncovers a novel function of an Argonaute protein outside of the miRNA effector pathway, in buffering dsRNA-induced interferon responses. As AGO1x expression is tightly linked to breast cancer cell proliferation, our study suggests a new direction for limiting tumor growth.