Type 1 Interferons (IFN-I) are a major focus of research in autoimmune diseases because of their ability to define clinical phenotypes and treatment responses. Depending on disease context, IFN-I can drive either inflammatory or immunosuppressive responses. This dual nature of IFN-I has thus been a major challenge in determining their exact functions in autoimmunity. In this work, we investigate the mechanisms driven by IFN-I in two neuroinflammatory autoimmune diseases: neuromyelitis optica spectrum disorders (NMOSD) and multiple sclerosis (MS). In NMOSD, we establish that IFN-I, T-helper 17 (TH17) and interleukin-6 (IL-6) cooperate to drive severe disease pathology and that IFNI impact B cells directly to drive TH17 pathogenicity via IL-6. In MS, we describe markers associated with active relapse, namely, low IFN-I, low transitional B cells and high neurofilament light (NFL). Finally, using a B cell driven model of neuroinflammation, we show that the mechanisms driven by IFN-I during disease depends on the inflammatory or regulatory functions of B cells. Overall, our findings demonstrate that heterogeneity in T-helper subsets, endogenous IFN-I levels and B cell functions influences the differential effects of IFN-I in NMOSD and MS.