Low density lipoprotein (LDL) is readily oxidized under certain conditions, resulting in the formation of oxidized LDL (oxLDL). Despite numerous in vitro reports that reveal the pathogenic role of oxidative stress, anti-oxidative strategies have underperformed in the clinic. In this study, we examine the role of oxLDL in brain inflammatory responses using cultured rat brain microglia. We demonstrate that oxLDL inhibits lipopolysaccharide (LPS)-induced inflammatory responses in these cells. It also decreases LPS-induced expression of inducible nitric oxide synthase and production of nitric oxide, and reduces LPS-induced secretion of tumor necrosis factor-alpha and monocyte chemoattractant protein-1. Oxysterols, known components of oxLDL and endogenous agonists of liver X receptor, can simulate the inhibitory effects of oxLDL in LPS-activated microglia. In addition, their inhibitory effects were mimicked by liver X receptor (LXR) agonists and potentiated by a retinoid X receptor agonist, suggesting these molecules heterodimerize to function as oxysterol receptors. Taken together, our results demonstrate that oxLDL inhibits LPS-induced inflammatory responses in brain microglia and that these inhibitory effects are mediated by oxysterols and, at least in part, by the nuclear receptor LXR. Our results suggest an additional mechanism of action for oxidative stress that acts indirectly via modulation of inflammatory responses. Although further studies are needed, these results answer in part the question of why anti-oxidative strategies have not been successful in clinical situations. Moreover, as brain inflammation participates in the initiation and progression of several neurodegenerative disorders, the present data provide information that should prove a useful guide for designing therapeutic strategies to combat oxidative brain diseases.