Toll-like receptor 7 (Tlr7) deficiency-accelerated severe COVID-19 is associated with reduced production of interferons (IFNs). However, the underlying mechanisms remain elusive. To address these questions, we utilize Tlr7 and Irf7 deficiency mice, single-cell RNA analysis together with bone marrow transplantation approaches. We demonstrate that at the early phase of infection, SARS-CoV-2 causes the upregulation of Tlr7, Irf7, and IFN pathways in the lungs of the infected mice. The deficiency of Tlr7 and Irf7 globally and/or in immune cells in mice increases the severity of COVID-19 via impaired IFN activation in both immune and/or non-immune cells, leading to increased lung viral loads. These effects are associated with reduced IFN alpha and gamma levels in the circulation. The deficiency of Tlr7 tends to cause the reduced production and nuclear translocation of interferon regulatory factor 7 (IRF7) in the lungs of the infected mice, indicative of reduced IRF7 activation. Despite higher amounts of lung viral antigen, Tlr7 or Irf7 deficiency resulted in substantially reduced production of antibodies against SARS-CoV-2, thereby delaying the viral clearance. These results highlight the importance of the activation of TLR7 and IRF7 leading to IFN production on the development of innate and adaptive immunity against COVID-19.