RNA molecules such as single-stranded RNA (ssRNA) and small interfering RNA (siRNA) duplexes induce Toll-like receptor (TLR)-mediated immune stimulation after intracellular delivery. We have previously shown that selective incorporation of 2'-O-methyl (2'OMe) residues into siRNA abrogates cytokine production without reduction of gene silencing activity. Here we show that 2'OMe-modified RNA acts as a potent inhibitor of RNA-mediated cytokine induction in both human and murine systems. This activity does not require the direct incorporation of 2'OMe nucleotides into the immunostimulatory RNA or that the 2'OMe nucleotide-containing RNA be annealed as a complementary strand to form a duplex. Our results indicate that 2'OMe RNA acts as a potent antagonist of immunostimulatory RNA. We further show that 2'OMe RNA is able significantly to reduce both interferon-alpha (IFN-alpha) and interleukin-6 (IL-6) induction by the small-molecule TLR7 agonist loxoribine in human peripheral blood mononuclear cells (human PBMCs), in murine Flt3L dendritic cells (Flt3L DCs), and in vivo in mice. These results indicate that 2'OMe-modified RNA may have utility as an inhibitor of TLR7 with potential applications in the treatment of inflammatory and autoimmune diseases that involve TLR7-mediated immune stimulation.