Interleukin-10 (IL-10) is a cytokine that has pleiotropic effects on a variety of different cell types. Although many of the biologic responses induced by IL-10 are also induced by other cytokines, such as IL-6, IL-10 is relatively unique in its ability to potently inhibit production of pro-inflammatory cytokines in macrophages. In this study, we have used gain-of-function and loss-of-function genetic approaches to define the intracellular components involved in the different biologic actions of IL-10. Herein, we demonstrate that the ability of IL-10 to inhibit tumor necrosis factor alpha (TNFalpha) production in lipopolysaccharide-stimulated macrophages requires the presence of Stat3, Jak1, and two distinct regions of the IL-10 receptor intracellular domain. Macrophages deficient in Stat3 or Jak1 were unable to inhibit lipopolysaccharide-induced TNFalpha production following treatment with murine IL-10. Structure-function analysis of the intracellular domain of the IL-10 receptor alpha chain showed that whereas two redundant Stat3 recruitment sites (427YQKQ430 and 477YLKQ480) were required for all IL-10-dependent effects on either B cells or macrophages, expression of IL-10-dependent anti-inflammatory function required the presence on the intracellular domain of the IL-10 receptor of a carboxyl-terminal sequence containing at least one functionally critical serine. These results thus demonstrate that IL-10-induced inhibition of TNFalpha production requires two distinct regions of the IL-10 receptor intracellular domain and thereby establish a distinctive molecular basis for the developmental versus the anti-inflammatory actions of IL-10.