Human cytomegalovirus (HCMV) causes life-threatening disease in solid organ and stem cell transplant recipients, as well as in neonates, due in part to the lack of a licenced vaccine. Interferon (IFN) β is a cytokine that induces cells to acquire an “antiviral” state and coordinates the functions of a number of cellular immune mediators, providing an important link between the innate and adaptive immune system. In order to determine the impact of endogenously expressed IFNβ on viral replication and its immune stimulatory capacity we utilised bacterial artificial chromosome technology to generate a clinical isolate of HCMV that expresses IFNβ. Infection of primary human fibroblasts (HFs) with this virus (HCMV-IFNβ) revealed severe attenuation of viral replication/ spread. The expression of several interferon stimulated genes, including 2’,5’-OAS1, MxA, PKR and ISG15, were upregulated when uninfected HFs were pre-treated with supernatant generated from HFs infected with HCMV-IFNβ. Furthermore, these cells were protected against subsequent viral infection. Increased cell-surface expression of the antigen presentation molecules MHC class I and MHC class II, as well as the co-stimulatory molecules CD80 and CD86, was observed when monocyte derived dendritic cells (MDDCs) were treated with supernatants generated from HFs infected with HCMV-IFNβ. Furthermore, when MDDCs generated from CMV seropositive donors were stimulated with HCMV specific protein pp65 in the presence of supernatant generated from HFs infected with HCMV-IFNβ, an increase in autologous cytotoxic CD8+ T cell proliferation was observed. These results demonstrate that endogenous IFNβ expression by HCMV renders this virus severely attenuated in its replicative/ spread capacity due to the induction of an antiviral state. However it also enhances the antigen presentation ability of MDDCs. This study provides proof-of-principle of a novel approach to generate a live-attenuated, but still highly immunogenic vaccine via manipulation of a key cellular immune mediator.