Immunostimulatory sequences (ISS) that contain CpG motifs have been demonstrated to exert antipathogen and antitumour immunity in animal models through several mechanisms, including the activation of natural killer (NK) cells to secrete interferon‐γ (IFN‐γ) and to exert lytic activity. Since NK cells lack the ISS receptor TLR9, the exact pathway by which NK cells are activated by ISS is unclear. We determined that ISS‐induced IFN‐γ from NK cells is primarily dependent upon IFN‐α release from plasmacytoid dendritic cells (PDCs), which directly activates the NK cell. However, further analysis indicated that other PDC‐released soluble factor(s) may contribute to IFN‐γ induction. Indeed, tumour necrosis factor‐α (TNF‐α) was identified as a significant contributor to ISS‐mediated activation of NK cells and was observed to act in an additive fashion with IFN‐α in the induction of IFN‐γ from NK cells and to up‐regulate CD69 expression on NK cells. This activity of TNF‐α, however, was dependent upon the presence of PDC‐derived factors such as type I interferon. These results illustrate an important function for type I interferon in innate immunity, which is not only to activate effectors like NK cells directly, but also to prime them for enhanced activation by other factors such as TNF‐α.