Bluetongue is an infectious disease caused by bluetongue virus (BTV), which affects sheep, goat, cattle and certain wild ruminants. However severe clinical signs are usually seen with significant mortality in sheep than cattle and goat. To date, comparative studies on innate immune responses of sheep and goat infected with BTV is lacking. In this study, we compared the innate immune response of sheep and goat by infecting the peripheral blood mononuclear cells (PBMCs) with BTV serotype 23. In our study, we observed that sheep PBMCs supports higher virus replication than goat PBMCs. To delineate the role of innate immune response in differential viral replication observed in this study, we examined TLR3 (Receptor for dsRNA virus) mRNA expression and cytokine profiles (IL-1β, Il-6, IL-8, Il-10, IL-12p40, TNF-α, IFN-γ and IFN-α) following Poly I:C (TLR3 ligand) stimulation and BTV 23 infection. In our present study, sheep PBMCs had significantly higher TLR3 mRNA levels, TLR3 specific ligand (Poly I:C) stimulation resulted in increased levels of IFN-γ at transcriptional and translational levels along with IL-8 and IL-10 at transcriptional levels. Whereas, the levels of TNF-α was higher in goat PBMCs at transcriptional levels. BTV infected sheep PBMCs expressed significantly higher levels of IFN-γ at transcriptional and translational levels along with IL-6, IL-8 and IL-10 at transcriptional levels. Whereas the expression levels of TNF-α and IFN-α at transcriptional and translational levels were significantly high in goat PBMCs. To examine the potential factor for consistent increase in the expression of TNF-α, we sequenced the promoter region of TNF-α and identified a total of five single nucleotide polymorphisms (SNP) and one indel in goat TNF-α promoter region. Luciferase assay for transcriptional activity of the promoter showed that goat TNF-α has significantly enhanced transcriptional activity in comparison with sheep TNF-α promoter. Altogether, our data suggests that the expression levels of TNF-α and IFN-α and/or IL-10 plays crucial role in replication of BTV 23.