We show that DNA methyltransferase inhibitors (DNMTis) upregulate immune signaling in cancer through the viral defense pathway. In ovarian cancer (OC), DNMTis trigger cytosolic sensing of double-stranded RNA (dsRNA) causing a type I interferon response and apoptosis. Knocking down dsRNA sensors TLR3 and MAVS reduces this response 2-fold and blocking interferon beta or its receptor abrogates it. Upregulation of hypermethylated endogenous retrovirus (ERV) genes accompanies the response and ERV overexpression activates the response. Basal levels of ERV and viral defense gene expression significantly correlate in primary OC and the latter signature separates primary samples for multiple tumor types from The Cancer Genome Atlas into low versus high expression groups. In melanoma patients treated with an immune checkpoint therapy, high viral defense signature expression in tumors significantly associates with durable clinical response and DNMTi treatment sensitizes to anti-CTLA4 therapy in a pre-clinical melanoma model. Display omitted •DNMTis induce an interferon response in cancer cells by activating dsRNA sensors•DNMTis induce ERV demethylation and expression helping trigger the dsRNA response•DNMTi viral defense genes in melanoma track with patient response to immune therapy•DNMTi treatment sensitizes to anti-CTLA-4 immunotherapy in a melanoma mouse model DNA methyltransferase inhibitors upregulate endogenous retroviruses in tumor cells to induce an growth-inhibiting immune response. High expression of the genes associated with the anti-viral response seems to potentiate a response to immune checkpoint therapy.