Toll-like receptor (TLR)-mediated immune responses are downregulated by several mechanisms that affect signaling pathways. However, it remains elusive how TLR-mediated gene expression is differentially modulated. Here, we show that IkappaBNS, a TLR-inducible nuclear IkappaB protein, negatively regulates induction of a subset of TLR-dependent genes through inhibition of NF-kappaB activity. IkappaBNS-deficient macrophages and dendritic cells show increased TLR-mediated expression of genes such as IL-6 and IL-12p40, which are induced late after TLR stimulation. In contrast, IkappaBNS-deficient cells showed normal induction of genes that are induced early or induced via IRF-3 activation. LPS stimulation of IkappaBNS-deficient macrophages prolonged NF-kappaB activity at the specific promoters, indicating that IkappaBNS mediates termination of NF-kappaB activity at selective gene promoters. Moreover, IkappaBNS-deficient mice are highly susceptible to LPS-induced endotoxin shock and intestinal inflammation. Thus, IkappaBNS regulates inflammatory responses by inhibiting the induction of a subset of TLR-dependent genes through modulation of NF-kappaB activity.