Aggressive fibromatosis (also called desmoid tumor) is a benign locally invasive soft tissue tumor of mesenchymal origin. This difficult to treat tumor is characterized by increased levels of beta-catenin mediated Tcf-dependent transcriptional activation due to mutations in components of the canonical WNT signaling pathway. We found that type 1 interferon signaling is activated and associated response genes upregulated in human and murine aggressive fibromatosis tumors and that their expression is regulated by beta-catenin. We hypothesized that type 1 interferon signaling promotes tumor formation in aggressive fibromatosis and when mice deficient for the type 1 interferon receptor (Ifnar 1 -/-) were crossed with mice predisposed to aggressive fibromatosis tumor formation (Apc/Apc1638N), a significant decrease in tumor formation was observed compared to littermate controls. In addition, we found that Ifnar 1 -/- mice have fewer numbers of mesenchymal progenitor cells compared to littermate controls. This suggests that type 1 interferon signaling may play a role in regulating the pool of mesenchymal progenitor cells and in turn presents a potential mechanism by which this pathway affects tumorigenesis in aggressive fibromatosis.