Nucleic acids are powerful triggers of innate immunity and can adopt the Z-conformation, an unusual left-handed double helix. Here, we studied the biological function(s) of Z-RNA recognition by the adenosine deaminase ADAR1, mutations in which cause Aicardi-Goutières syndrome. Adar1mZα/mZα mice, bearing two point mutations in the Z-nucleic acid binding (Zα) domain that abolish Z-RNA binding, displayed spontaneous induction of type I interferons (IFNs) in multiple organs, including in the lung, where both stromal and hematopoietic cells showed IFN-stimulated gene (ISG) induction. Lung neutrophils expressed ISGs induced by the transcription factor IRF3, indicating an initiating role for neutrophils in this IFN response. The IFN response in Adar1mZα/mZα mice required the adaptor MAVS, implicating cytosolic RNA sensing. Adenosine-to-inosine changes were enriched in transposable elements and revealed a specific requirement of ADAR1's Zα domain in editing of a subset of RNAs. Thus, endogenous RNAs in Z-conformation have immunostimulatory potential curtailed by ADAR1, with relevance to autoinflammatory disease in humans.