Patients with systemic lupus erythematosus (SLE) display a complex blood transcriptome whose cellular origin is poorly resolved. Using single-cell RNA sequencing, we profiled ~276,000 peripheral blood mononuclear cells from 33 children with SLE with different degrees of disease activity and 11 matched controls. Increased expression of interferon-stimulated genes (ISGs) distinguished cells from children with SLE from healthy control cells. The high ISG expression signature (ISGhi) derived from a small number of transcriptionally defined subpopulations within major cell types, including monocytes, CD4+ and CD8+ T cells, natural killer cells, conventional and plasmacytoid dendritic cells, B cells and especially plasma cells. Expansion of unique subpopulations enriched in ISGs and/or in monogenic lupus-associated genes classified patients with the highest disease activity. Profiling of ~82,000 single peripheral blood mononuclear cells from adults with SLE confirmed the expansion of similar subpopulations in patients with the highest disease activity. This study lays the groundwork for resolving the origin of the SLE transcriptional signatures and the disease heterogeneity towards precision medicine applications.