Small ruminant lentiviruses (SRLV) cause multisystemic chronic inflammatory disease and significant economic losses in sheep and goats worldwide. However, no vaccines or therapies are currently available. In this study, a recombinant Sendai virus (SeV) vector encoding the SRLV gag-P25 gene (rSeV-GFP-P25) from the EV1 strain was generated using In-FUSION cloning and rescued using the SeV reverse genetic system. Transgene expression and stimulation of innate immunity and interferon-stimulated genes (ovine A3Z1, OBST2 and SAMHD1) were evaluated in ovine skin fibroblasts (OSF) transduced with SeV-GFP and rSeV-GFP-P25. Additionally, to characterize the effect of the SRLV restriction in transduced OSF, the SRLV DNA load was quantified at different times post-transduction and post-infection with strain EV1. Using immunohistochemistry and image analysis, transgene expression and tissue distribution of recombinant P25 were studied in two lambs inoculated intranasally, one with rSeV-GFP-P25 and the other with SeV-GFP. rSeV-GFP-P25 induced efficient and transient transgene expression in vitro and in vivo. Furthermore, OSF transduced with rSeV-GFP-P25 presented upregulation of TLR2, TLR3, TLR6, TLR7, RIG-I, MyD88 and IFN-β, whereas SeV-GFP did not induce TLR6 or IFN-β upregulation. Among the interferon-stimulated genes, OBST2 was significantly upregulated after transduction with rSeV-GFP-P25 compared with the empty vector. SRLV restriction gradually increased and persisted after transduction with SeV-GFP and rSeV-GFP-P25, with OSF transduced three times showing cumulative restriction. Forty-eight hours post-inoculation in vivo, marked P25 expression was observed in ciliated epithelial cells and submucosal macrophages/dendritic cells of the nasal mucosa. This study reinforces the important role of the innate immune response in controlling SRLV infection and suggests that rSeV-GFP-P25 is a potential vaccine candidate against SRLV.