Previous studies have shown that IL-10 can induce the expression of the suppressor of cytokine signaling 3 (SOCS-3) mRNA in human monocytes and neutrophils, suggesting that the capacity of IL-10 to inhibit the expression of LPS-inducible proinflammatory genes may depend on SOCS-3 induction. However, no direct experimental evidence has been provided to support such hypothesis. Herein, we show that stable transfection of SOCS-3 into the mouse macrophage cell line J774 resulted in an inhibition of NO, TNF-α, IL-6, and GM-CSF secretion in response to LPS at levels similar to those exerted by IL-10 in LPS-stimulated wild-type J774. Constitutive SOCS-3 expression also down-regulated the mRNA expression of inducible NO synthase and IL-6 and impaired the production of TNF-α, mainly at a post-transcriptional level. In addition, SOCS-3-transfected cells displayed a constitutive expression of the IL-1R antagonist gene, consistent with the observation that IL-10 enhances IL-1R antagonist mRNA in LPS-stimulated wild-type cells. Furthermore, in peritoneal macrophages harvested from mice carrying heterozygous disruption of the SOCS-3 gene, IL-10 was less effective in repressing LPS-stimulated TNF-α and NO production. Taken together, our data show that SOCS-3 inhibits LPS-induced macrophage activation, strongly supporting the idea that it plays a role in the molecular mechanism by which IL-10 down-modulates the effector functions of LPS-activated macrophages. Finally, we show that forced expression of SOCS-3 significantly suppresses the ability of IL-10 to trigger tyrosine phosphorylation of STAT3. Therefore, SOCS-3 functions both as an LPS signal inhibitor and as a negative feedback regulator of IL-10/STAT3 signaling.