Classical STAT1 activation in response to TLR agonists occurs by phosphorylation of the Y701 and S727 residues through autocrine type I IFN signaling and p38 MAPK signaling, respectively. In this study, we report that the TLR9 agonist CpG DNA induced Ifn-beta mRNA, as well as downstream type I IFN-dependent genes, in a MyD88-dependent manner in mouse myeloid dendritic cells. This pathway was required for maximal TNF and IL-6 secretion, as well as expression of cell surface costimulatory molecules. By contrast, neither A- nor B-type CpG-containing oligonucleotides induced Ifn-beta in mouse bone marrow-derived macrophages (BMM) and a CpG-B oligonucleotide did not induce IFn-beta in the macrophage-like cell line, J774. In BMM, STAT1 was alternatively activated (phosphorylated on S727, but not Y701), and was retained in the cytoplasm in response to CpG DNA. CpG DNA responses were altered in BMM from STAT1(S727A) mice; Il-12p40 and Cox-2 mRNAs were more highly induced, whereas Tlr4 and Tlr9 mRNAs were more repressed. The data suggest a novel inhibitory function for cytoplasmic STAT1 in response to TLR agonists that activate p38 MAPK but do not elicit type I IFN production. Indeed, the TLR7 agonist, R837, failed to induce Ifn-beta mRNA and consequently triggered STAT1 phosphorylation on S727, but not Y701, in human monocyte-derived macrophages. The differential activation of Ifn-beta and STAT1 by CpG DNA in mouse macrophages vs dendritic cells provides a likely mechanism for their divergent roles in priming the adaptive immune response.