B cells from patients with common variable immunodeficiency (CVID) who are heterozygous for transmembrane activator and CAML interactor (TACI) mutation C104R, which abolishes ligand binding, fail to produce Igs in response to TACI ligand. It is not known whether this is due to haploinsufficiency or dominant interference. Using in vitro transfection assays, here we demonstrate that C104R and the corresponding murine TACI mutant, C76R, which also does not bind ligand, dominantly interfere with TACI signaling. This effect was dependent on preassociation of the mutants with WT TACI in the absence of ligand. The mutants did not interfere with ligand binding by WT TACI, suggesting that they may act by disrupting ligand-induced receptor rearrangement and signaling. This work demonstrates that TACI preassembles as an oligomeric complex prior to ligand binding and provides a mechanistic insight into how the heterozygous C104R TACI mutation can potentially lead to CVID.