Recognition of pathogen-derived foreign nucleic acids is central to innate immune defense. This requires discrimination between structurally highly similar self and nonself nucleic acids to avoid aberrant inflammatory responses as in the autoinflammatory disorder Aicardi-Goutières syndrome (AGS). How vast amounts of self RNA are shielded from immune recognition to prevent autoinflammation is not fully understood. Here, we show that human SAM-domain- and HD-domain-containing protein 1 (SAMHD1), one of the AGS-causing genes, functions as a single-stranded RNA (ssRNA) 3′exonuclease, the lack of which causes cellular RNA accumulation. Increased ssRNA in cells leads to dissolution of RNA-protein condensates, which sequester immunogenic double-stranded RNA (dsRNA). Release of sequestered dsRNA from condensates triggers activation of antiviral type I interferon via retinoic-acid-inducible gene I-like receptors. Our results establish SAMHD1 as a key regulator of cellular RNA homeostasis and demonstrate that buffering of immunogenic self RNA by condensates regulates innate immune responses.