Calpain enzymes proteolytically modulate cellular function and have been implicated in inflammatory diseases. In this study, we found that calpain levels did not differ between intestinal tissues from inflammatory bowel disease (IBD) patients and healthy controls, but IBD tissues showed increased levels of the endogenous calpain inhibitor, calpastatin (CAST). To investigate the role of CAST in the immune system during IBD, mice were x-ray irradiated, reconstituted with either CAST-knockout (KO) or wild-type (WT) bone marrow, and subjected to dextran sulfate sodium-induced colitis. CAST-KO recipients with induced colitis exhibited more severe weight loss, bloody diarrhea, and anemia compared with WT controls. Histological evaluation of colons from KO recipients with colitis revealed increased inflammatory pathology. Macrophages purified from the colons of KO recipients had higher IL-6, TNF-α, and IFN-γ mRNA levels compared with WT controls. Mechanistic investigations using small interfering RNA and KO bone marrow to generate CAST-deficient macrophages showed that CAST deficiency during activation with bacterial pathogen associated molecular patterns, including heat-killed Enterococcus faecalis or CpG DNA, led to increased IκB cleavage, NF-κB nuclear localization, and IL-6 and TNF-α secretion. Thus, CAST plays a central role in regulating macrophage activation and limiting pathology during inflammatory disorders like IBD.