The 37‐kDa protein annexin 1 (Anx‐1; lipocortin 1) has been implicated in the regulation of phagocytosis, cell signaling, and proliferation and is postulated to be a mediator of glucocorticoid action in inflammation and in the control of anterior pituitary hormone release. Here, we report that mice lacking the Anx‐1 gene exhibit a complex phenotype that includes an altered expression of other annexins as well as of COX‐2 and cPLA₂. In carrageenin‐ or zymosan‐induced inflammation, Anx‐1^−/− mice exhibit an exaggerated response to the stimuli characterized by an increase in leukocyte emigration and IL‐1β generation and a partial or complete resistance to the antiinflammatory effects of glucocorticoids. Anx‐1^−/− polymorphonuclear leucocytes exhibited increased spontaneous migratory behavior in vivo whereas in vitro, leukocytes from Anx‐1^−/− mice had reduced cell surface CD 11b (MAC‐1) but enhanced CD62L (L‐selectin) expression and Anx‐1^−/− macrophages exhibited anomalies in phagocytosis. There are also gender differences in activated leukocyte behavior in the Anx‐1^−/−mice that are not seen in the wild‐type animals, suggesting an interaction between sex hormones and inflammation in Anx‐1^−/− animals.