The immunoresponsive gene 1 (IRG1) protein has crucial functions in embryonic implantation and neurodegeneration. IRG1 promotes endotoxin tolerance by increasing A20 expression in macrophages through reactive oxygen species (ROS). The cytoprotective protein heme oxygenase-1 (HO-1), which generates endogenous carbon monoxide (CO), is expressed in the lung during Lipopolysaccharide (LPS) tolerance and cross tolerance. However, the detailed molecular mechanisms and functional links between IRG1 and HO-1 in the innate immune system remain unknown. In the present study, we found that the CO releasing molecule-2 (CORM-2) and chemical inducers of HO-1 increased IRG1 expression in a time- and dose-dependent fashion in RAW264.7 cells. Furthermore, inhibition of HO-1 activity by zinc protoporphyrin IX (ZnPP) and HO-1 siRNA significantly reduced expression of IRG1 under these conditions. In addition, treatment with CO and HO-1 induction significantly increased A20 expression, which was reversed by ZnPP and HO-1 siRNA. LPS-stimulated TNF-α was significantly decreased, whereas IRG1 and A20 were increased by CORM-2 application and HO-1 induction, which in turn were abrogated by ZnPP. Interestingly, siRNA against IRG1 and A20 reversed the effects of CO and HO-1 on LPS-stimulated TNF-α production. Additionally, CO and HO-1 inducers significantly increased IRG1 and A20 expression and downregulated TNF-α production in a LPS-stimulated sepsis mice model. Furthermore, the effects of CO and HO-1 on TNF-α production were significantly reversed when ZnPP was administered. In conclusion, CO and HO-1 induction regulates IRG1 and A20 expression, leading to inhibition of inflammation in vitro and in an in vivo mice model.