ABSTRACT Vector-borne flaviviruses, such as tick-borne encephalitis virus (TBEV), West Nile virus, and dengue virus, cause millions of infections in humans. TBEV causes a broad range of pathological symptoms, ranging from meningitis to severe encephalitis or even hemorrhagic fever, with high mortality. Despite the availability of an effective vaccine, the incidence of TBEV infections is increasing. Not much is known about the role of the innate immune system in the control of TBEV infections. Here, we show that the type I interferon (IFN) system is essential for protection against TBEV and Langat virus (LGTV) in mice. In the absence of a functional IFN system, mice rapidly develop neurological symptoms and succumb to LGTV and TBEV infections. Type I IFN system deficiency results in severe neuroinflammation in LGTV-infected mice, characterized by breakdown of the blood-brain barrier and infiltration of macrophages into the central nervous system (CNS). Using mice with tissue-specific IFN receptor deletions, we show that coordinated activation of the type I IFN system in peripheral tissues as well as in the CNS is indispensable for viral control and protection against virus induced inflammation and fatal encephalitis. IMPORTANCE The type I interferon (IFN) system is important to control viral infections; however, the interactions between tick-borne encephalitis virus (TBEV) and the type I IFN system are poorly characterized. TBEV causes severe infections in humans that are characterized by fever and debilitating encephalitis, which can progress to chronic illness or death. No treatment options are available. An improved understanding of antiviral innate immune responses is pivotal for the development of effective therapeutics. We show that type I IFN, an effector molecule of the innate immune system, is responsible for the extended survival of TBEV and Langat virus (LGTV), an attenuated member of the TBE serogroup. IFN production and signaling appeared to be essential in two different phases during infection. The first phase is in the periphery, by reducing systemic LGTV replication and spreading into the central nervous system (CNS). In the second phase, the local IFN response in the CNS prevents virus-induced inflammation and the development of encephalitis.