It is widely believed that innate immune responses to Borrelia burgdorferi (Bb) are primarily triggered by the spirochete's outer membrane lipoproteins signaling through cell surface TLR1/2. We recently challenged this notion by demonstrating that phagocytosis of live Bb by peripheral blood mononuclear cells (PBMCs) elicited greater production of proinflammatory cytokines than did equivalent bacterial lysates. Using whole genome microarrays, we show herein that, compared to lysates, live spirochetes elicited a more intense and much broader transcriptional response involving genes associated with diverse cellular processes; among these were IFN-beta and a number of interferon-stimulated genes (ISGs), which are not known to result from TLR2 signaling. Using isolated monocytes, we demonstrated that cell activation signals elicited by live Bb result from cell surface interactions and uptake and degradation of organisms within phagosomes. As with PBCMs, live Bb induced markedly greater transcription and secretion of TNF-alpha, IL-6, IL-10 and IL-1beta in monocytes than did lysates. Secreted IL-18, which, like IL-1beta, also requires cleavage by activated caspase-1, was generated only in response to live Bb. Pro-inflammatory cytokine production by TLR2-deficient murine macrophages was only moderately diminished in response to live Bb but was drastically impaired against lysates; TLR2 deficiency had no significant effect on uptake and degradation of spirochetes. As with PBMCs, live Bb was a much more potent inducer of IFN-beta and ISGs in isolated monocytes than were lysates or a synthetic TLR2 agonist. Collectively, our results indicate that the enhanced innate immune responses of monocytes following phagocytosis of live Bb have both TLR2-dependent and -independent components and that the latter induce transcription of type I IFNs and ISGs.