Antiflammin-1 (AF-1) is a synthetic nonapeptide with a similar sequence to the conserved sequence of CC10 secreted by lung Clara cells. Studies suggest that it is potent inhibitor of inflammation. We investigated the effects and possible mechanisms of AF-1 on LPS-induced alveolar macrophage (AM) activation in vitro. AMs harvested from the BALF of Sprague-Dawley (SD) rat were treated with various concentrations of AF-1 both simultaneously and after LPS stimulation. The concentrations of the cytokines IL-1beta, IL-6, and IL-10 in the supernatant were detected by an enzyme-linked immunosorbent assay. The mRNA expression levels of these cytokines in AMs were analyzed using quantitative RT-PCR. To investigate more fully the possible mechanisms by which AF-1 modulates the expression of cytokines, cells were pretreated with anti-IL-10 antibody. Toll-like receptor-4 (TLR-4) expression on the cell surface was also detected using flow cytometry. The results showed that AF-1 suppressed mRNA expression and protein production of IL-1beta and IL-6, while it promoted IL-10 expression in LPS-stimulated AMs, in a dose-dependent manner. The inhibitory effects of AF-1 on IL-1beta were significantly decreased when endogenous production of IL-10 was blocked. AF-1 also showed an effect on downregulated TLR-4 expression in LPS-stimulated AMs. The data show for the first time that AF-1 modulates the AM response to LPS by regulating TLR-4 expression and upregulating IL-10 secretion, which could be another important mechanism in the AF-1 inhibiting effect on inflammation.