The interferon (IFN) response is a critical first line of defence against viral infection. As a result, most RNA viruses have evolved strategies to evade or modulate the IFN response in their natural hosts. Here, we use parainfluenza virus 5 (PIV5) as a model to investigate how IFN influences paramyxovirus persistence. We show that during infection, PIV5 strains that are capable of inhibiting IFN signalling can gradually and asynchronously dismantle the antiviral state to establish persistence. Interestingly, a PIV5 strain that is not able to block IFN signalling was also able to establish persistence in cells that are in an antiviral state albeit more slowly. Next, we used human bronchial epithelial cells differentiated in air-liquid interface (HBEC-ALI), a physiologically relevant model, to investigate the control of PIV5 infection by IFN. Initially, PIV5 infection undergoes limited spread within the HBEC-ALI monolayer. However, inhibition of IFN signalling resulted in unrestricted viral spread throughout the monolayer, indicating that IFN strongly restricts viral replication. We also assessed the role of IFN in persistent PIV5 infection using the HBEC-ALI model. Interestingly, through blocking IFN signalling in persistently infected HBEC-ALI cultures the virus was released from a persistent state and was able to spread throughout the monolayer. These findings demonstrate that the interplay between PIV5 and the IFN response is central to the establishment and maintenance of persistence. We propose that similar subtle strategies are likely to be used by other RNA viruses to establish persistent infections, with important consequences for viral epidemiology and pathogenesis.