Capsaicin, a major ingredient of hot pepper, is considered to exhibit anti-inflammatory properties. Our previous study demonstrated that capsaicin inhibited the production of pro-inflammatory mediators through NF-kappaB inactivation in LPS-stimulated macrophages. In order to further clarify the mechanism underlying the anti-inflammatory action of capsaicin, we investigated whether capsaicin alters PPARgamma activity, which regulates the production of the pro-inflammatory cytokine TNFalpha. Capsaicin significantly inhibited the production of TNFalpha by macrophages in a dose-dependent manner. Simultaneous exposure of the cells to capsaicin and PPARgamma agonist troglitazone or RXR agonist LG100268 resulted in stronger inhibition of TNFalpha production compared to the cells treated with either capsaicin, troglitazone, or LG100268 alone. Luciferase reporter assay revealed that capsaicin induced GAL4/PPARgamma chimera and full length PPARgamma (PPRE) transactivations in a dose-dependent manner. Furthermore, a specific PPARgamma antagonist T0070907 abrogated the inhibitory action of capsaicin on LPS-induced TNFalpha production by RAW 264.7 cells, indicating that capsaicin acts like a ligand for PPARgamma. Our data demonstrate for the first time that the anti-inflammatory action of capsaicin may be mediated by PPARgamma activation in LPS-stimulated RAW 264.7 cells.