Type I interferons (IFN) play essential roles in numerous physiological processes, acting as central coordinators in the host response against pathogens. Upon sensing of microbial ligands, host cells rapidly activate the type I IFN response to prime innate and adaptive immune responses. Recent studies suggest tonic IFN are maintained by commensal microbes and critical in mounting an effective immune response to viral pathogens. Further, emerging developments have extended an immunoregulatory role of type I IFN in the maintenance of immune homeostasis. Yet whether immunomodulatory bacteria from the gut microbiota operate through IFN signaling to promote immune tolerance remains largely unanswered. Here we show that commensal microbes are necessary to maintain type I IFN responses in intestinal tissues. Specifically, Bacteroides fragilis induced type I IFN response in dendritic cells (DCs) and this pathway is necessary for the induction of IL-10-producing Foxp3+ regulatory T cells (Tregs). In addition, we show upregulation of type I IFN related genes in Tregs from mesenteric lymph nodes and colonic lamina propria of mice colonized with B. fragilis. Our findings demonstrate type I interferon signaling plays an important role in microbiota-mediated immune tolerance in the gut.