Systemic lupus erythematosus (SLE) is a severe autoimmune disease that causes multiple-organ dysfunction mainly affecting women in their childbearing years. Type I IFN synthesis is usually triggered by viruses, and its production is tightly regulated and limited in time in health individuals. However, many patients with systemic autoimmune diseases including SLE have signs of aberrant production of type I interferon (IFN) and display an increased expression of IFN-inducible genes. Continuous type I IFNs derived from activated plasmacytoid dendritic cells (pDCs) by interferogenic immune complexes (ICs) and migration of these cells to tissues both break immune tolerance and promote an on-going autoimmune reaction in human body. By the means of detecting type I IFNs and IFN-inducible genes, it can help with diagnosis and evaluation of SLE in early stage and more efficiently. Anti-IFN-α monoclonal antibodies in SLE patients were recently reported and is now being investigated in phase II clinical trails. In this review, we focus on recent research progress in type I IFN and IFN-inducible genes. Possible mechanisms behind the dysregulated type I IFN system in SLE and how they contribute to the development of an autoimmune process, and act as a biomarker and therapeutic target will be reviewed.