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Activation of transposable elements (TEs) can cause cellular damage. Cytoplasmic nucleic acid sensing pathways evolved to detect pathogens, but can also serve to cull cells with inappropriate TE activation as TEs can be viral mimetics. Epigenetic silencing of TEs is mediated in part by DNA methylation, but it is not clear if TE activation or the immune system contribute to the cellular damage caused by loss of DNA methylation. Here, we provide mechanistic insight into the observation of an activated interferon response in the liver of zebrafish larvae with deletion in critical components of the DNA methylation machinery, uhrf1 and dnmt1. We focus on dissecting the relationship between DNA methylation, TE activation and induction of an immune response through cytoplasmic DNA and double stranded RNA sensing pathways and identify tnfa as a mediator of cell death in the liver of these mutants. Integrated RNAseq and methylome analysis identified LTR transposons as the most upregulated in these mutants and also the most methylated in control larvae, indicating a direct role of DNA methylation in suppressing this TE subclass. RNAseq analysis from these same samples revealed expression signatures of a type-I interferon response and of tnfa activation, mimicking the pattern of gene expression in virally infected cells. CRISPR/Cas9 mediated depletion of the cellular antiviral sensors sting and mavs reduced expression of interferon response genes and tnfa depletion dramatically reduced cell death in uhrf1 mutant livers. This suggests that the antiviral response induced by DNA hypomethylation and TE activation in the liver is mediated by the …