The prostaglandin, 15-deoxy Δ^12,14-prostaglandin J₂ (15d-PGJ₂)¹, and thiazolidinediones are ligands for the nuclear receptor, peroxisome proliferator-activated receptor (PPAR)-γ, which mediates anti-inflammatory activity by suppressing murine macrophage (Mφ) production of the inflammatory mediator, nitric oxide (NO). Here, we elucidated this anti-inflammatory activity further by investigating whether PPAR-γ ligands regulated a panel of proinflammatory and anti-inflammatory cytokines produced by primary inflammatory murine Mφ (thioglycollate-elicited peritoneal exudate Mφ; PEM). Thiazolidinediones and 15d-PGJ₂ suppressed lipopolysaccharide (LPS)-induced PEM production of NO and IL-12(p40) to a greater extent than IL-6 and TNF-α production. Whereas 15d-PGJ₂ showed the greatest extent of suppression of proinflammatory mediator production, the thiazolidinedione, BRL49653, was the most potent compound studied. Surprisingly, treatment with the Mφ-activation cytokine, IFN-γ, prevented PPAR-γ ligands from suppressing the proinflammatory cytokines completely and reduced their suppression of NO production substantially, demonstrating that activation conditions affect PPAR-γ-mediated, anti-inflammatory activity. Western analysis demonstrated that the antagonistic activity of IFN-γ did not involve modulation of PPAR-γ expression but showed that IFN-γ interfered with PPAR-γ ligand regulation of p42/p44 MAP kinase activation and the cytosolic disappearance of NF-κB upon LPS stimulation. Finally, we showed that PPAR-γ ligands did not substantially modulate production of the anti-inflammatory cytokine, IL-10, and that antibody-mediated neutralization of IL-10 did not prevent the ligands from suppressing proinflammatory mediator production. In contrast to studies with noninflammatory human monocytes and Mφ, our results demonstrate that primary murine inflammatory Mφ are extremely sensitive to the anti-inflammatory activity of PPAR-γ ligands. These results suggest that drugs such as thiazolidinediones may be most effective in suppressing Mφ activity early (i.e., in the absence of lymphocyte-derived IFN-γ) in the inflammatory process.