Complex interplay between T helper (Th) cells and macrophages contributes to the formation and progression of atherosclerotic plaques. While Th1 cytokines promote inflammatory activation of lesion macrophages, Th2 cytokines attenuate macrophage-mediated inflammation and enhance their repair functions. In spite of its biologic importance, the biochemical and molecular basis of how Th2 cytokines promote maturation of anti-inflammatory macrophages is not understood. We show here that in response to interleukin-4 (IL-4), signal transducer and activator of transcription 6 (STAT6) and PPARγ-coactivator-1β (PGC-1β) induce macrophage programs for fatty acid oxidation and mitochondrial biogenesis. Transgenic expression of PGC-1β primes macrophages for alternative activation and strongly inhibits proinflammatory cytokine production, whereas inhibition of oxidative metabolism or RNAi-mediated knockdown of PGC-1β attenuates this immune response. These data elucidate a molecular pathway that directly links mitochondrial oxidative metabolism to the anti-inflammatory program of macrophage activation, suggesting a potential role for metabolic therapies in treating atherogenic inflammation.