The objective of this study was to elucidate the role of the cellular proteasome on endotoxin-mediated activation of the macrophage. To study this role, THP-1 cells were stimulated with lipopolysaccharide (LPS) with selective cells being pretreated with the proteasome inhibitor, lactacystin or MG-132. LPS stimulation led to the phosphorylation and degradation of IRAK, followed by activation of JNK/SAPK, ERK 1/2, and p38. Subsequently, LPS induced the degradation of IkappaB, and the nuclear activation of NF-kappaB and AP-1. Activation of these pathways was associated with the production of IL-6, IL-8, IL-10, and TNF-alpha. Proteasome inhibition with either lactacystin or MG-132 attenuated LPS-induced IRAK degradation, and enhanced activation of JNK/SAPK, ERK 1/2, and p38. Proteasome inhibition, also, led to increased LPS-induced AP-1 activation, and attenuated LPS-induced IkappaB degradation resulting in abolished NF-kappaB activation. Proteasome inhibition led to significant modulation of LPS-induced cytokine production; increased IL-10, no change in IL-6, and decreased IL-8, and TNF-alpha. Thus, this study demonstrates that cellular proteasome is critical to regulation of LPS-induced signaling within the macrophage, and inhibition of the proteasome results in a conversion to an anti-inflammatory phenotype.