In contrast to the importance of type II interferon-γ (IFN-γ) in control of toxoplasmosis, the role of type I IFN is less clear. We demonstrate here that TgIST, a secreted effector previously implicated in blocking type II IFN-γ signaling, also blocked IFN-β responses by inhibiting STAT1/STAT2-mediated transcription in infected cells. Consistent with a role for type I IFN in cell intrinsic control, ∆Tgist mutants were more susceptible to growth inhibition by murine and human macrophages activated with IFN-β. Additionally, type I IFN was important for production of IFN-γ by natural killer (NK) cells and recruitment of inflammatory monocytes at the site of infection. Mice lacking type I IFN receptors (Ifnar1^−/−) showed increased mortality following infection with wild-type parasites and decreased virulence of ∆Tgist parasites was restored in Ifnar1^−/− mice. The findings highlight the importance of type I IFN in control of toxoplasmosis and illuminate a parasite mechanism to counteract the effects of both type I and II IFN-mediated host defenses.