Interferon (IFN) is emerging as a promising therapeutic for COVID-19. Yet it was also proposed that IFN induces transcription of the SARS-CoV-2 entry receptor ACE2, potentially increasing viral infectivity. In this preprint, Onabajo et al. show that it is actually a shorter transcript of ACE2, coined dACE2, that was previously detected by RNA sequencing upon exposure to IFN. Expression of dACE2, but not the canonical ACE2, is induced by viral infection as well as treatment with type I, II and III IFNs. dACE2 is also highly expressed in several tumour tissues, owing to an inflamed microenvironment that resembles virus-infected tissues. Importantly, dACE2 cannot bind to the SARS-CoV-2 spike protein receptor-binding domain and lacks carboxypeptidase activity, dispelling concerns that IFN treatment might enhance viral infection.