IL-10 produced by dendritic cells (DC) can limit or terminate ongoing inflammatory responses by inhibiting the proinflammatory cytokine production. Currently, the molecular mechanism by which IL-10 suppresses cytokine production is still ill-defined. In this study, we showed that IL-10 produced by DC dampens myeloid differentiation factor (MyD)88-dependent, but not MyD88-independent signaling. At the molecular level, IL-10 induces ubiquitination and subsequent protein degradation of MyD88-dependent signaling molecules, including IL-1 receptor-associated kinase 4 and TNF-receptor associated factor 6. Protein degradation by IL-10 was associated with decreased phosphorylation of p38, JNK, and IKK. All of these events were prevented by either blocking IL-10 receptor signaling or inhibiting proteasome degradation. IL-10 induced LPS hyporesponsiveness using the same mechanisms, i.e., ubiquitination and protein degradation. Thus, a previously undescribed regulatory mechanism by which IL-10-mediated protein degradation contributes to the inhibition of inflammatory cytokine production and endotoxin tolerance in DC.