Cockayne syndrome is a segmental progeria most often caused by mutations in the CSB gene encoding a SWI/SNF-like ATPase required for transcription-coupled DNA repair (TCR). Over 43 Mya before marmosets diverged from humans, a piggyBac3 (PGBD3) transposable element integrated into intron 5 of the CSB gene. As a result, primate CSB genes now generate both CSB protein and a conserved CSB-PGBD3 fusion protein in which the first 5 exons of CSB are alternatively spliced to the PGBD3 transposase. We show by microarray analysis that expression of the fusion protein alone in CSB-null UV-sensitive syndrome cells (UVSS1KO) cells induces an interferon-like response that resembles both the innate antiviral response and the prolonged interferon response normally maintained by unphosphorylated STAT1 (U-STAT1); moreover, as might be expected based on conservation of the fusion protein, this potentially cytotoxic interferon-like response is largely reversed by coexpression of functional CSB protein. Interestingly, expression of CSB and the CSB-PGBD3 fusion protein together, but neither alone, upregulates the insulin growth factor binding protein IGFBP5 and downregulates IGFBP7, suggesting that the fusion protein may also confer a metabolic advantage, perhaps in the presence of DNA damage. Finally, we show that the fusion protein binds in vitro to members of a dispersed family of 900 internally deleted piggyBac elements known as MER85s, providing a potential mechanism by which the fusion protein could exert widespread effects on gene expression. Our data suggest that the CSB-PGBD3 fusion protein is important in both health and disease, and could play a role in Cockayne syndrome.