We recently identified autocrine interferon (IFN)β as a novel mechanism mediating tumor necrosis factor (TNF)α-induced expression of inflammatory genes in airway smooth muscle (ASM) cells, including CD38, known to regulate calcium signaling. Here, we investigated the putative involvement of IFNβ in regulating TNFα-induced airway hyper-responsiveness (AHR), a defining feature of asthma. Using our pharmacodynamic model to assess ex vivo AHR isolated murine tracheal rings, we found that TNFα-induced enhanced contractile responses to carbachol and bradykinin was abrogated by neutralizing anti-IFNβ antibody or in tracheal rings deficient in CD38. In cultured human ASM cells, where CD38 has been involved in TNFα-induced enhanced calcium signals to carbachol and bradykinin, we found that neutralizing anti-IFNβ prevented TNFα enhancing action only on carbachol responses but not to that induced by bradykinin. In a well-characterized model of allergic asthma (mice sensitized and challenged with Aspergillus fumigatus (Af)), we found heightened expression of both IFNβ and CD38 in the airways. Furthermore, allergen-associated AHR to methacholine, assessed by lung resistance and dynamic compliance, was completely suppressed in CD38-deficient mice, despite the preservation of airway inflammation. These data provide the first evidence that ASM-derived IFNβ and CD38 may play a significant role in the development of TNFα-associated AHR.