Abstract We propose an economical model addressing the generation of the Inverse Seesaw mechanism from the spontaneous breaking of a local $$U(1)_{B-L}$$ <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML"> <mml:mrow> <mml:mi>U</mml:mi> <mml:msub> <mml:mrow> <mml:mo>(</mml:mo> <mml:mn>1</mml:mn> <mml:mo>)</mml:mo> </mml:mrow> <mml:mrow> <mml:mi>B</mml:mi> <mml:mo>-</mml:mo> <mml:mi>L</mml:mi> </mml:mrow> </mml:msub> </mml:mrow> </mml:math> , with the Majorana masses of the sterile neutrinos radiatively generated from the dark sector. The field content of the Standard Model is extended by neutral scalars and fermionic singlets, and the gauge group is extended with a $$U(1)_{B-L}$$ <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML"> <mml:mrow> <mml:mi>U</mml:mi> <mml:msub> <mml:mrow> <mml:mo>(</mml:mo> <mml:mn>1</mml:mn> <mml:mo>)</mml:mo> </mml:mrow> <mml:mrow> <mml:mi>B</mml:mi> <mml:mo>-</mml:mo> <mml:mi>L</mml:mi> </mml:mrow> </mml:msub> </mml:mrow> </mml:math> and a discrete $${\mathbb {Z}}_4$$ <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML"> <mml:msub> <mml:mi>Z</mml:mi> <mml:mn>4</mml:mn> </mml:msub> </mml:math> symmetries. Besides dynamically generating the Inverse Seesaw and thus small masses to the active neutrinos, our model offers two possible dark matter candidates, one scalar and one fermionic, stable thanks to a remnant $${\mathbb {Z}}_2$$ <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML"> <mml:msub> <mml:mi>Z</mml:mi> <mml:mn>2</mml:mn> </mml:msub> </mml:math> symmetry. Our model complies with bounds and constraints form dark matter direct detection, invisible Higgs decays and $$Z'$$ <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML"> <mml:msup> <mml:mi>Z</mml:mi> <mml:mo>′</mml:mo> </mml:msup> </mml:math> collider searches for masses of the dark sector at the TeV scale.