CATERPILLER (NOD, NBD-LRR) proteins are rapidly emerging as important mediators of innate and adaptive immunity. Among these, Monarch-1 operates as a novel attenuating factor of inflammation by suppressing inflammatory responses in activated monocytes. However, the molecular mechanisms by which Monarch-1 performs this important function are not well understood. In this report, we show that Monarch-1 inhibits CD40-mediated activation of NF-kappaB via the non-canonical pathway in human monocytes. This inhibition stems from the ability of Monarch-1 to associate with and induce proteasome-mediated degradation of NF-kappaB inducing kinase. Congruently, silencing Monarch-1 with shRNA enhances the expression of p52-dependent chemokines.