Foamy macrophages, which have prominent lipid droplets (LDs), are found in a variety of disease states. Toll-like receptor agonists drive triacylglycerol (TG)-rich LD development in macrophages. Here we explore the basis and significance of this process. Our findings indicate that LD development is the result of metabolic commitment to TG synthesis on a background of decreased fatty acid oxidation. TG synthesis is essential for optimal inflammatory macrophage activation as its inhibition, which prevents LD development, has marked effects on the production of inflammatory mediators, including IL-1β, IL-6 and PGE2, and on phagocytic capacity. The failure of inflammatory macrophages to make PGE2 when TG-synthesis is inhibited is critical for this phenotype, as addition of exogenous PGE2 is able to reverse the anti-inflammatory effects of TG synthesis inhibition. These findings place LDs in a position of central importance in inflammatory macrophage activation.