Hepatitis delta virus (HDV), a satellite virus of HBV, is regarded as the most severe type of hepatitis virus because of the substantial morbidity and mortality. The IFN system is the first line of defense against viral infections and an essential element of antiviral immunity; however, the role of the hepatic IFN system in controlling HBV-HDV infection remains poorly understood. Herein, we showed that HDV infection of human hepatocytes induced a potent and persistent activation of the IFN system whereas HBV was inert in triggering hepatic antiviral response. Moreover, we demonstrated that HDV-induced constitutive activation of the hepatic IFN system resulted in a potent suppression of HBV while modestly inhibiting HDV. Thus, these pathogens are equipped with distinctive immunogenicity and varying sensitivity to the antiviral effectors of IFN, leading to the establishment of a paradoxical mode of viral interference wherein HDV, the superinfectant, outcompetes HBV, the primary pathogen. Furthermore, our study revealed that HDV-induced constitutive IFN system activation led to a state of IFN refractoriness, rendering therapeutic IFNs ineffective. The present study provides potentially novel insights into the role of the hepatic IFN system in regulating HBV-HDV infection dynamics and its therapeutic implications through elucidating the molecular basis underlying the inefficacy of IFN-based antiviral strategies against HBV-HDV infection.