An initial exposure to lipopolysaccharide (LPS, also known as endotoxin), which activates macrophages via Toll-like receptor 4 (TLR4), induces a transient state of hypo-responsiveness to a subsequent challenge with LPS. The mechanism underlying this phenomenon, termed endotoxin tolerance, remains poorly understood although the activation/upregulation of a number of negative regulators has been implicated. Related to this, we recently demonstrated that the SH2-containing inositol-5′-phosphatase, SHIP, which is a key negative regulator of the PI3K pathway in hematopoietic cells, is essential for endotoxin tolerance. Specifically, we found that SHIP−/− bone marrow derived macrophages (BMmΦs) do not display endotoxin tolerance. Moreover, an initial LPS treatment of wild-type BMmΦs increases the level of SHIP protein 10 fold and this increase is critical for the hypo-responsiveness to a subsequent LPS stimulation. Interestingly, this increase in SHIP protein is mediated by the LPS-induced production of autocrine-acting TGFβ and neutralizing antibodies to TGFβ, as well as antisense oligonucleotides to SHIP, block LPS-induced endotoxin tolerance. In vivo studies with SHIP+/+ and −/− mice confirm these in vitro findings and show a correlation between the duration of endotoxin tolerance and elevated SHIP levels (Sly et al., Immunity, in Press). We have now followed up on these studies by exploring the role of SHIP in the stimulation of other Toll-like receptors. Specifically, we asked whether SHIP plays a role in repressing CpG-induced pro-inflammatory cytokine production, which is mediated via the activation of TLR9. Our results, using SHIP+/+ and −/− BMmΦs, suggest that SHIP negatively regulates this TLR as well and is required for CpG-induced tolerance. Moreover, we found that CpG treated SHIP−/− BMmΦs show higher pro-inflammatory cytokine production compared to their SHIP+/+ counterparts when challenged with LPS. This indicates that SHIP plays a critical role in dampening down inflammatory responses in the innate immune system.