Macrophages have important roles in both lipid metabolism and inflammation and are central to the pathogenesis of atherosclerosis. The liver X receptors (LXRs) are established mediators of lipid-inducible gene expression, but their role in inflammation and immunity is unknown. We demonstrate here that LXRs and their ligands are negative regulators of macrophage inflammatory gene expression. Transcriptional profiling of lipopolysaccharide (LPS)-induced macrophages reveals reciprocal LXR-dependent regulation of genes involved in lipid metabolism and the innate immune response. In vitro, LXR ligands inhibit the expression of inflammatory mediators such as inducible nitric oxide synthase, cyclooxygenase (COX)-2 and interleukin-6 (IL-6) in response to bacterial infection or LPS stimulation. In vivo, LXR agonists reduce inflammation in a model of contact dermatitis and inhibit inflammatory gene expression in the aortas of atherosclerotic mice. These findings identify LXRs as lipid-dependent regulators of inflammatory gene expression that may serve to link lipid metabolism and immune functions in macrophages.