Bacterial lipopolysaccharide (LPS) triggers innate immune responses through Toll-like receptor (TLR) 4. We show here that the suppressor of cytokine-signaling-1 (SOCS1/JAB) is rapidly induced by LPS and negatively regulates LPS signaling. SOCS1^+/− mice or SOCS1^−/− mice with interferon-γ (IFNγ)-deficient background were more sensitive to LPS-induced lethal effects than were wild-type littermates. LPS-induced NO₂⁻ synthesis and TNFα production were augmented in SOCS1^−/− macrophages. Furthermore, LPS tolerance, a protection mechanism against endotoxin shock, was also strikingly reduced in SOCS1^−/− cells. LPS-induced I-κB and p38 phosphorylation was upregulated in SOCS1^−/− macrophages, and forced expression of SOCS1 suppressed LPS-induced NF-κB activation. Thus, SOCS1 directly suppresses TLR4 signaling and modulates innate immunity.