DAP12 is an ITAM-containing adapter that associates with receptors in myeloid and NK cells. DAP12-associated receptors can give activation signals leading to cytokine production; however, in some situations, DAP12 inhibits cytokine production stimulated through TLRs and FcRs. Here we show that Triggering Receptor Expressed on Myeloid cells (TREM)-2 is responsible for the DAP12-mediated inhibition in mouse macrophages. A chimeric receptor composed of the extracellular domain of TREM-2 and the cytoplasmic domain of DAP12 inhibited the TLR- and FcR-induced TNF production of DAP12-deficient macrophages, whereas a TREM-1 chimera did not. In wild-type macrophages, TREM-2 knockdown increased TLR-induced TNF production. A TREM-2 Fc fusion protein bound to macrophages, indicating that macrophages express a TREM-2 ligand. Thus, the interaction of TREM-2 and its ligand results in an inhibitory signal that can reduce the inflammatory response.