Recent studies have suggested that type I interferons (IFN) play a role in the pathogenesis of lupus erythematosus (LE), an autoimmune disease of unknown aetiology. Natural interferon‐producing plasmacytoid cells have been demonstrated in cutaneous LE (CLE) lesions, along with elevated levels of IFN‐α mRNA. The hypothesis in the current study was that local production of type I IFNs in CLE induces Th1‐biased inflammation via induction of IFN‐inducible chemokines such as IP10/CXCL10 leading to the recruitment of chemokine receptor CXCR3 expressing T‐cells into skin lesions. Skin biopsies from 21 patients suffering from different types of active cutaneous LE were analysed for the expression of MxA, a protein specifically induced by type I interferons, the IFN‐inducible protein IP10/CXCL10, and the chemokine receptor CXCR3, characteristic for Th1 cells, by immunohistochemistry. Additionally, peripheral CD4+ and CD8+ T‐cells were investigated for the expression of MxA and CXCR3 by flow cytometry. Cutaneous LE lesions were characterized by strong expression of MxA indicating the induction of localized type I IFN signalling in the skin. Large numbers of infiltrating CXCR3 positive lymphocytes were detected in CLE skin lesions, and correlated closely with lesional MxA expression (epidermis: Spearman's ρ = 0.56, p < 0.001; dermis: ρ = 0.82, p < 0.001). Intracellular MxA levels of circulating CD4+ and CD8+ T‐cells were significantly enhanced in patients with active CLE lesions. The percentage of peripheral T‐cells expressing CXCR3 was significantly decreased in specific CLE subtypes. Expression of IP10/CXCL10 in the epidermis links type I IFN signalling and recruitment of CXCR3+ T cells. These results suggest an important role for type I interferon signalling in the pathogenesis of cutaneous lupus erythematosus. It is proposed that type I IFNs induce a Th1‐biased inflammatory immune response, with recruitment of CXCR3‐expressing T‐lymphocytes into the skin. Copyright © 2005 Pathological Society of Great Britain and Ireland. Published by John Wiley & Sons, Ltd.