Toll-like receptor 7 (TLR7) signaling predominantly regulates production of type I interferons (IFNs), which has been suggested in clinical studies to be antifibrotic. However, the mechanistic role of the TLR7-type I IFN axis in liver fibrosis has not been elucidated. In the present study, liver fibrosis was induced in wild-type (WT), TLR7-deficient, and IFN-α/β receptor-1 (IFNAR1)-deficient mice and TLR7-mediated signaling was assessed in liver cells isolated from these mice. TLR7-deficient and IFNAR1-deficient mice were more susceptible to liver fibrosis than WT mice, indicating that TLR7-type I IFN signaling exerts a protective effect against liver fibrosis. Notably, the hepatic expression of interleukin-1 receptor antagonist (IL-1ra) was suppressed in TLR7- or IFNAR1-deficient mice compared with respective WT mice, and treatment with recombinant IL-1ra reduced liver fibrosis. In vivo activation of TLR7 significantly increased IFNa4 and IL-1ra expression in the liver. Interestingly, each cytokine had a different cellular source, showing that dendritic cells (DCs) are the responsible cell type for production of type I IFN, while Kupffer cells (KCs) mainly produce IL-1ra in response to type I IFN. Furthermore, TLR7 activation by R848 injection suppressed liver fibrosis and production of proinflammatory cytokines, and these effects were dependent on type I IFN signaling. Consistent with in vivo data, IFN-α significantly induced IL-1ra production in primary KCs. Conclusion: TLR7 signaling activates DCs to produce type I IFN, which in turn induces antifibrogenic IL-1ra production in KCs. Thus, manipulation of the TLR7-type I IFN-IL-1ra axis may be a new therapeutic strategy for the treatment of liver fibrosis. (Hepatology 2014;60:237–249)