Bacterial DNA triggers B-cell proliferation and induces immunoglobulin secretion. Chromatin–IgG complexes activate autoreactive B cells by co-engaging B-cell receptor (BCR) and TLR-9, thus suggesting a role for innate signaling in systemic autoimmunity. Spleen cells from lupus prone Palmerston North (PN) mice produce several fold less IL-12p40 than controls in response to CpG–oligodeoxynucleotides (ODNs). Here we show that B cells are primarily responsible for this abnormality. The removal of B cells from PN cultures markedly increased IL-12p40. Moreover, the addition of purified B cells back to PN splenocyte cultures resulted in a B-cell number dependent/ IL-10-mediated suppression of IL-12p40. The B cells were the major source of IL-10. In response to CpG, B cells from several lupus strains produced twice as a much IL-10 as controls, but failed to produce IL-10 when stimulated through BCR or CD40. PN and control mice expressed IL-10R similarly, and the difference in IL-10 secretion remained when anti-IL-10R blocking antibodies were used. IFN-γ and IL-4 regulated CpG-induced IL-10 secretion in opposite directions. The abnormal IL-10 response in lupus mice was derived from B cells with the marginal zone phenotype, and could be downregulated with inhibitory ODNs. We hypothesize that TLR-9 activated lupus B cells can modulate T-cell mediated inflammatory responses through IL-10 production. Therefore, B cells may contribute to the lupus pathogenesis in many different ways: as antigen-presenting cells for self antigens, as effector cells for autoantibody production, and as IL-10 secreting regulatory cells.