Systemic lupus erythematosus (SLE) is an autoimmune disease, characterised by increased expression of type I interferon (IFN)-regulated genes and a striking sex imbalance towards females. Through combined genetic, in silico, in vitro, and ex vivo approaches, we define CXorf21, a gene of hitherto unknown function, which escapes X-chromosome inactivation, as a candidate underlying the Xp21.2 SLE association. We demonstrate that CXorf21 is an IFN-response gene and that the sexual dimorphism in expression is magnified by immunological challenge. Fine-mapping reveals a single haplotype as a potential causal cis-eQTL for CXorf21. We propose that expression is amplified through modification of promoter and 3'-UTR chromatin interactions. Finally, we show that the CXORF21 protein colocalises with TLR7, a pathway implicated in SLE pathogenesis. Our study reveals modulation in gene expression affected by the combination of two hallmarks of SLE: CXorf21 expression increases in a both an IFN-inducible and sex-specific manner.