IFN-beta, an effective therapy against relapsing-remitting multiple sclerosis, is naturally secreted during the innate immune response against viral pathogens. The objective of this study was to characterize the immunomodulatory mechanisms of IFN-beta targeting innate immune response and their effects on dendritic cell (DC)-mediated regulation of T cell differentiation. We found that IFN-beta1a in vitro treatment of human monocyte-derived DCs induced the expression of TLR7 and the members of its downstream signaling pathway, including MyD88, IL-1R-associated kinase 4, and TNF receptor-associated factor 6, while it inhibited the expression of IL-1R. Using small interfering RNA TLR7 gene silencing, we confirmed that IFN-beta1a-induced changes in MyD88, IL-1R-associated kinase 4, and IL-1R expression were dependent on TLR7. TLR7 expression was also necessary for the IFN-beta1a-induced inhibition of IL-1beta and IL-23 and the induction of IL-27 secretion by DCs. Supernatant transfer experiments confirmed that IFN-beta1a-induced changes in DC cytokine secretion inhibit Th17 cell differentiation as evidenced by the inhibition of retinoic acid-related orphan nuclear hormone receptor C and IL-17A gene expression and IL-17A secretion. Our study has identified a novel therapeutic mechanism of IFN-beta1a that selectively targets the autoimmune response in multiple sclerosis.