Canine influenza virus (CIV) significantly threatens the canine population and public health. Tetherin, an innate immune factor, plays an important role in the defense against pathogen invasion and has been discovered to restrict the release of various enveloped viruses. Two isoforms of canine tetherin (tetherin-X1 and tetherin-X2) were identified in peripheral blood leukocytes of mixed-breed dogs using reverse transcription polymerase chain reaction (RT-PCR). Amino acid alignment revealed that relative to full-length tetherin (tetherin-X1) and truncated canine tetherin (tetherin-X2) exhibited deletion of 34 amino acids. The deletion occurred at the C-terminus of the coiled-coiled ectodomain and the N-terminus of the glycosylphosphatidylinositol (GPI)-anchor domain. Tetherin-X2 was localized subcellularly at the cell membrane, which was consistent with the localization of tetherin-X1. In addition, canine tetherin-X1 and tetherin-X2 restricted the release of H3N2 CIV. However, canine tetherin-X1 had higher antiviral activity than canine tetherin-X2, indicating that the C-terminus of the coiled-coiled ectodomain and the N-terminus of the GPI-anchor domain of canine tetherin (containing the amino acids deleted in tetherin-X2) are critical for its ability to restrict H3N2 CIV release. This study provides insights for understanding the key functional domains of tetherin that restrict CIV release.