Angiotensin-converting enzyme 2 (ACE2) is an entry receptor for severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) and a regulator of several physiological processes. ACE2 has recently been proposed to be interferon (IFN) inducible, suggesting that SARS-CoV-2 may exploit this phenomenon to enhance viral spread and questioning the efficacy of IFN treatment in coronavirus disease 2019. Using a recent de novo transcript assembly that captured previously unannotated transcripts, we describe a new isoform of ACE2, generated by co-option of intronic retroelements as promoter and alternative exon. The new transcript, termed MIRb-ACE2, exhibits specific expression patterns across the aerodigestive and gastrointestinal tracts and is highly responsive to IFN stimulation. In contrast, canonical ACE2 expression is unresponsive to IFN stimulation. Moreover, the MIRb-ACE2 translation product is a truncated, unstable ACE2 form, lacking domains required for SARS-CoV-2 binding and is therefore unlikely to contribute to or enhance viral infection.