Since its emergence in 2019, SARS-CoV-2 has caused significant morbidity and mortality in humans. SARS-CoV-2-induced impaired antiviral and excessive inflammatory responses drive acute lung injury and severe pneumonia. However, the key pattern recognition receptors that elicit effective antiviral and pathogenic inflammatory responses are not well defined. Since CoVs are single-stranded RNA (ssRNA) viruses that make double-stranded RNA (dsRNA) intermediates during replication, we assessed the antiviral and pro-inflammatory roles of ssRNA and dsRNA mimics in mouse macrophages. We show that R837-TLR7 signaling induced excessive inflammation, while PolyIC-TLR3/MDA activation caused robust IFN production. Since R837-TLR7 induced high levels of inflammatory cytokines, using a novel mouse-adapted SARS-COV-2, we examined the role of TLR7 signaling in COVID-19 pathogenesis. Our results show that TLR7 KO mice were more susceptible to SARS-CoV-2 infection as compared to WT mice. Further investigation of SARS-CoV-2 infected lungs showed significantly reduced mRNA levels of antiviral interferons (IFNα/β/λ), ISGs (ISG15 and CXCL10), and several pro-inflammatory cytokine/chemokines in TLR7 KO lungs compared to WT. Interestingly, immunolabelling of cells isolated from infected WT and TLR7 KO lungs showed a high neutrophil count in TLR7 KO mice compared to WT mice. Furthermore, reduced lung IFN levels and increased mortality correlated with high lung viral titer in TLR7 KO mice. In summary, our findings conclusively establish that TLR7 signaling is protective during SARS-CoV-2 infection, and despite TLR7-mediated robust inflammatory cytokine production, TLR7-induced IFN and ISG responses play a key role in host protection.