On infiltrating inflamed tissue, macrophages respond to the local microenvironment and develop one of two broad phenotypes: classically activated (M1) macrophages that cause tissue injury and alternatively activated macrophages that promote repair. Understanding how this polarization occurs in vivo is far from complete, and in this study, using a Th1-mediated macrophage-dependent model of acute glomerulonephritis, nephrotoxic nephritis, we examine the role of suppressor of cytokine signaling (SOCS) 1 and SOCS3. Macrophages in normal kidneys did not express detectable SOCS proteins but those infiltrating inflamed glomeruli were rapidly polarized to express either SOCS1 (27±6%) or SOCS3 (54±12%) but rarely both (10±3%). Rat bone marrow-derived macrophages incubated with IFN-γ or LPS expressed SOCS1 and SOCS3, whereas IL-4 stimulated macrophages expressed SOCS1 exclusively. By contrast, incubation with IFN-γ and LPS together suppressed SOCS1 while uniquely polarizing macrophages to SOCS3 expressing cells. Macrophages in which SOCS3 was knocked down by short interfering RNA responded to IFN-γ and LPS very differently: they had enhanced STAT3 activity; induction of macrophage mannose receptor, arginase and SOCS1; restoration of IL-4 responsiveness that is inhibited in M1 macrophages; and decreased synthesis of inflammatory mediators (NO and IL-6) and costimulatory molecule CD86, demonstrating that SOCS3 is essential for M1 activation. Without it, macrophages develop characteristic alternatively activated markers when exposed to classical activating stimuli. Lastly, increased glomerular IL-4 in nephrotoxic nephritis inhibits infiltrating macrophages from expressing SOCS3 and was associated with attenuated glomerular injury. Consequently, we propose that SOCS3 is essential for development of M1 macrophages in vitro and in vivo.