In vitro transcribed messenger RNA (IVT mRNA) has emerged as a pivotal tool in mRNA-based therapies and has been extensively employed in gene function studies and genetic tool applications. However, the IVT process generates double-stranded RNA (dsRNA) by-products that are recognized by dsRNA sensors, triggering innate immune responses. In this study, we comprehensively analyzed the detrimental effects of dsRNA by-products on early zebrafish embryos, revealing that these by-products induce cell necrosis and delay maternal-zygotic transition (MZT) by reducing global translation efficiency via Prkra (Protein Activator Of Interferon Induced Protein Kinase; also called PACT in mammals), a dsRNA sensor recently identified in pluripotent cells. Importantly, we demonstrate that N1-methylpseudouridine (m1 Psi) modification of IVT mRNAs effectively mitigates these adverse effects, as m1 Psi-modified dsRNAs exhibit significantly lower binding affinity to the Prkra dimer. Our findings underscore a previously overlooked challenge in the use of IVT mRNA in early embryos and offer a robust solution to enhance the fidelity of mRNA applications. Furthermore, we elucidate that m1 Psi modification minimizes the dsRNA-induced stress response in pluripotent cells through a distinct mechanism.