Type I IFN (IFN-I) induce hundreds of antiviral genes as well as negative regulators that limit IFN-I signaling. Here, we investigate the family of 16 PARPs and find that 11 PARPs are ISGs, of which 8 PARPs inhibit IFN-I production. PARP7 is the most potent negative feedback regulator of IFN-I production. Using Parp7-/- and Parp7H532A/H532A mice, we show that PARP7 loss leads to systemic autoimmunity characterized by splenomegaly and increased autoantibodies and inflammatory cytokines. PARP7 loss also results in perivascular immune infiltration in the lung that forms tertiary lymphoid structures. Mechanistically, PARP7 inhibits multiple innate immune pathways in a cell-intrinsic and MARylation-dependent manner. PARP7 interacts with IRF3 through the catalytic domain and disrupts the IRF3:CBP/p300 transcriptional holocomplex required for IFN-I production. Irf3-/- or Irf3S1/S1 (transcription defective) or Sting-/- rescues Parp7H532A/H532A mouse autoimmunity and lung disease. Together, our study reveals physiological functions of PARP7 as a negative feedback regulator of IFN-I production that maintains immune homeostasis particularly in the lung.