In the liver, the JNK cascade is induced downstream of TNF receptors (TNFRs) in response to inflammatory, microbial, and toxic challenges. Sustained activation of JNK triggers programmed cell death (PCD), and hepatocyte survival during these challenges requires induction of the NF-kappaB pathway, which antagonizes this activation by upregulating target genes. Thus, modulation of JNK activity is crucial to the liver response to TNFR-mediated challenge. The basis for this modulation, however, is unknown. Here, we investigated the role of the NF-kappaB target Gadd45b in the regulation of hepatocyte fate during liver regeneration after partial hepatectomy. We generated Gadd45b(-/-) mice and found that they exhibited decreased hepatocyte proliferation and increased PCD during liver regeneration. Notably, JNK activity was markedly increased and sustained in livers of Gadd45b(-/-) mice compared with control animals after partial hepatectomy. Furthermore, imposition of a Jnk2-null mutation, attenuating JNK activity, completely rescued the regenerative response in Gadd45b(-/-) mice. Interestingly, Gadd45beta ablation did not affect hepatotoxic JNK signaling after a TNFR-mediated immune challenge, suggesting specificity in the inducible hepatic program for JNK restraint activated during distinct TNFR-mediated challenges. These data provide a basis for JNK suppression during liver regeneration and identify Gadd45beta as a potential therapeutic target in liver diseases.