Cytokines, most particularly TNF and type I IFN (IFN-alphabeta), have been long considered essential elements in the development of autoimmunity. Identification of TNF in the pathogenesis of rheumatoid arthritis and TNF antagonist therapy represent successes of immunology. IFN-alphabeta plays a major role in systemic lupus erythematosus (SLE), a prototype autoimmune disease characterized by a break of tolerance to nuclear components. Here, we show that TNF regulates IFN-alpha production in vitro at two levels. First, it inhibits the generation of plasmacytoid dendritic cells (pDCs), a major producer of IFN-alphabeta, from CD34+ hematopoietic progenitors. Second, it inhibits IFN-alpha release by immature pDCs exposed to influenza virus. Neutralization of endogenous TNF sustains IFN-alpha secretion by pDCs. These findings are clinically relevant, as five of five patients with systemic juvenile arthritis treated with TNF antagonists display overexpression of IFN-alpha-regulated genes in their blood leukocytes. These results, therefore, might provide a mechanistic explanation for the development of anti-dsDNA antibodies and lupus-like syndrome in patients undergoing anti-TNF therapy.