Interferon-β is an established treatment for patients with multiple sclerosis (MS) but its mechanisms of action are not well understood. Viral infections are a known trigger of MS relapses. Toll-like receptors (TLRs) are key components of the innate immune system, which sense conserved structures of viruses and other pathogens. Effects of interferon-β on mRNA levels of all known human TLRs (TLR1-10) and the TLR adaptor molecule MyD88 were analyzed in peripheral blood mononuclear cells (PBMCs) of healthy donors by quantitative real-time PCR and by transcriptome analysis in PBMCs of 25 interferon-β-treated patients with relapsing-remitting MS. Regulation of TLR protein expression by interferon-β was investigated by flow cytometry of leukocyte subsets of healthy subjects and of untreated, interferon-β-, or glatiramer acetate-treated patients with MS. Interferon-β specifically upregulated mRNA expression of TLR3, TLR7, and MyD88 and downregulated TLR9 mRNA in PBMCs of healthy donors as well as in PBMCs of patients with MS. Plasmacytoid dendritic cells (pDCs) were identified as the major cell type responding to interferon-β with increased expression of TLR7 and MyD88 protein. In line with this, expression of TLR7 protein was increased in pDCs of interferon-β-treated, but not untreated or glatiramer acetate-treated patients with MS. Interferon-β-induced upregulation of TLR7 in pDCs is of functional relevance since pre-treatment of PBMCs with interferon-β resulted in a strongly increased production of interferon-α upon stimulation with the TLR7 agonist loxoribine. Flow cytometry confirmed pDCs as the cellular source of interferon-α production induced by activation of TLR7. Thus, upregulation of TLR7 in pDCs and a consequently increased activation of pDCs by TLR7 ligands represents a novel immunoregulatory mechanism of interferon-β. We hypothesize that this mechanism could contribute to a reduction of virus-triggered relapses in patients with MS.