Toll-like receptor (TLR), a ligand for single-stranded RNA, has been implicated in the development of pathogenic anti-RNA autoantibodies both in systemic lupus erythematous (SLE) patients and in murine models of lupus. It is still unclear, however, where and how TLR7-mediated interactions affect the development of autoreactive B cells. We found that overexpression of TLR7 in transgenic mice (TLR7.1Tg) leads to marked alterations of transitional (T1) B cells, associated with their expansion and proliferation within the splenic red pulp (RP). This phenotype was intrinsic to the T1 subset of B cells and occurred independently of type 1 IFN signals. Overexpression of RNase in TLR7.1Tg mice significantly limited the expansion and proliferation of T1 cells, indicating that endogenous RNA complexes are driving their activation. TLR7.1Tg T1 cells were hyper-responsive to anti-IgM and TLR7 ligand stimulation in vitro and produced high concentrations of class-switched IgG2b and IgG2c, including anti-RNA antibodies. Our results demonstrate that initial TLR7 stimulation of B cells occurs at the T1 stage of differentiation in the splenic RP and suggest that dysregulation of TLR7 expression in T1 cells can result in production of autoantibodies.