Toll-like receptor 3 (TLR3) recognizes viral double-stranded RNA. It stimulates pro-inflammatory cytokine and interferon production. Here we reported the expression of a novel isoform of TLR3 in human astrocyte cell lines whose message is generated by alternative splicing. The isoform represents the N-terminus of the protein. It lacks many of the leucine-rich repeat domains, the transmembrane domain, and the intracellular Toll/interferon-1 receptor domain of TLR3. Type I interferons (interferon-α and interferon-β) induced the expression of this isoform. Exogenous overexpression of this isoform inhibited interferon regulatory factor 3, signal transducers and activators of transcription 1, and Inhibitor of kappa Bα signaling following stimulation. This isoform of TLR3 also inhibited the production of chemokine interferon-γ-inducible protein 10. Our study clearly demonstrated that the expression of this isoform of TLR3 was a negative regulator of signaling pathways and that it was inducible by type I interferons. We also found that this isoform could modulate inflammation in the brain.