The mitogen-activated protein kinase (MAPK) pathway plays a critical role in Toll-like receptor (TLR) signaling. MAPK phosphatase-1 (MKP-1) inhibits the MAPK pathway and decreases TLR signaling, but the regulation of MKP-1 is not completely understood. We now show that MKP-1 is acetylated, and that acetylation regulates its ability to interact with its substrates and deactivate inflammatory signaling. We found that LPS activates acetylation of MKP-1. MKP-1 is acetylated by p300 on lysine residue K57 within its substrate-binding domain. Acetylation of MKP-1 enhances its interaction with p38, thereby increasing its phosphatase activity and interrupting MAPK signaling. Inhibition of deacetylases increases MKP-1 acetylation and blocks MAPK signaling in wild-type (WT) cells; however, deacetylase inhibitors have no effect in cells lacking MKP-1. Furthermore, histone deacetylase inhibitors reduce inflammation and mortality in WT mice treated with LPS, but fail to protect MKP-1 knockout mice. Our data suggest that acetylation of MKP-1 inhibits innate immune signaling. This pathway may be an important therapeutic target in the treatment of inflammatory diseases.