Carbon monoxide (CO) at low concentrations has generated recent interest due to its ability to modulate the inflammatory response associated with chronic graft rejection, vascular injury and septic shock. Both in vivo and in vitro CO can inhibit the expression of pro-inflammatory genes such as TNFα in macrophages while simultaneously increasing the expression of the anti-inflammatory cytokine IL-10. The mechanisms by which this occurs are still unclear. To better understand the mechanisms underlying the effects of CO, we employed the Affymetrix GeneChip technology to evaluate the time-dependent expression patterns of >12,000 genes in macrophages stimulated with bacterial endotoxin (LPS) in the presence or absence of a low concentration of CO previously demonstrated to evoke an anti-inflammatory response. We were particularly interested whether CO would, by itself, modulate in a specific manner the expression of proteins that might explain the anti-inflammatory effects observed following subsequent administration of endotoxin. RAW 264.7 murine macrophages were grown to 75% confluency and then exposed to CO (250 ppm) for 3 hr prior to administration of LPS (10 ng/ml). At 0, 15, 30, 60, 120 and 240 min thereafter, total RNA was isolated by standard methods and the RNA was then labeled and hybridized to U74Av2 GeneChips. Of >12,000 genes assessed, 116 of 270 that were LPS-responsive were affected by CO treatment. CO inhibited the majority of LPS-induced pro-inflammatory cytokines and acute phase proteins including expression of early growth response-1 (Egr-1), a transcription factor that serves as a central intermediary regulating many genes. Egr-1 was nearly completely inhibited by CO as was Egr-1-dependent expression of tissue factor (TF) and PAI-1. Treatment of cells with CO alone led to a rapid early increase in PPARγ, the expression of which was essential for the anti-inflammatory effects of CO. Inhibition of PPARγ using the selective chemical inhibitor GW9662 reversed the CO inhibitory effects on LPS-induced Egr-1 and TF expression. Correlative in vivo experiments in mice showed that CO pre-treatment blocked endotoxin-induced Egr-1 expression and decreased markers of lung inflammmation the effects of which were also lost with inhibition of PPARγ. Our analyses of gene expression patterns has led to the first molecular understanding of how treatment with CO, in this case by inducing PPARγ, blocks the pro-inflammatory response. These experiments provide novel insights into the mechanisms and pathophysiology of endotoxic shock and identify cellular targets by which CO mediates these cytoprotective effects.