The pro-inflammatory cytokine macrophage migration inhibitory factor (MIF) acts as a physiological counter-regulator of the immuno-suppressive effects of glucocorticoids. However, the mechanisms whereby MIF exerts its counter-balancing effect remain largely unknown. Here we report that MAPK phosphatase 1 (MKP-1), an archetypal member of dual specificity phosphatase that inactivates MAPK activity in response to pro-inflammatory stimuli, is a critical target of MIF-glucocorticoid crosstalk. Recombinant MIF counter-regulated in a dose-dependent fashion dexamethasone inhibition of TNF and IL-8 production by RAW 264.7 macrophages and U-937 promonocytes stimulated with lipopolysaccharides (LPS) or with LPS plus phorbol 12-myristate 13-acetate. Stimulation of RAW 264.7 macrophages with dexamethasone or dexamethasone plus LPS led to a robust up-regulation of MKP-1 mRNA and protein expressions that were counter-regulated by addition of recombinant MIF. Antisense MIF macrophages expressing reduced levels of endogenous MIF produced higher amount of MKP-1 and lower amount of TNF after exposure to dexamethasone and dexamethasone plus LPS, indicating that endogenous MIF acts in an autocrine fashion to override glucocorticoid-induced MKP-1 expression and inhibition of cytokine production. Taken together, these data identify MKP-1 as a molecular target of MIF-glucocorticoid crosstalk and provide a molecular basis for the control of macrophage responses by a pair of physiological regulators of innate immunity.