Inflammation is a potentially self-destructive process that needs tight control. We have identified a nuclear signaling mechanism through which the low-density lipoprotein receptor-related protein 1 (LRP1) limits transcription of lipopolysaccharide (LPS)-inducible genes. LPS increases the proteolytic processing of the ectodomain of LRP1, which results in the gamma-secretase-dependent release of the LRP1 intracellular domain (ICD) from the plasma membrane and its translocation to the nucleus, where it binds to and represses the interferon-gamma promoter. Basal transcription of LPS target genes and LPS-induced secretion of proinflammatory cytokines are increased in the absence of LRP1. The interaction between LRP1-ICD and interferon regulatory factor 3 (IRF-3) promotes the nuclear export and proteasomal degradation of IRF-3. Feedback inhibition of the inflammatory response through intramembranous processing of LRP1 thus defines a physiological role for gamma-secretase.