Previously, using a forward genetic approach we identified differential expression of type I IFN as a positional candidate for an expression quantitative trait locus (eQTL) underlying B. burgdorferi arthritis-associated locus 1 (Bbaa1). In this study, we show that mAb blockade revealed a unique role for IFN-β in Lyme arthritis development in B6.C3-Bbaa1 mice. Genetic control of IFN-β expression was also identified in bone marrow-derived macrophages stimulated with B. burgdorferi, and was responsible for feed-forward amplification of interferon-stimulated genes. Reciprocal radiation chimeras between B6.C3-Bbaa1 and B6 mice revealed that arthritis is initiated by radiation-sensitive cells, but orchestrated by radiation-resistant components of joint tissue. Advanced congenic lines were developed to reduce the physical size of the Bbaa1 interval, and confirmed the contribution of type I IFN genes to Lyme arthritis. RNA-seq of resident CD45− joint cells from advanced interval specific recombinant congenic lines identified myostatin as uniquely upregulated in association with Bbaa1 arthritis development, and myostatin expression was linked to IFN-β production. Inhibition of myostatin in vivo suppressed Lyme arthritis in the reduced interval Bbaa1 congenic mice, formally implicating myostatin as a novel downstream mediator of joint-specific inflammatory response to B. burgdorferi.