Activation of the mitogen-activated protein kinases (MAPKs) and nuclear factor kappaB (NF-kappaB) cascades after Toll-like receptor (TLR) stimulation contributes to innate immune responses. Signal regulatory protein (SIRP) alpha, a member of the SIRP family that is abundantly expressed in macrophages, has been implicated in regulating MAPK and NF-kappaB signaling pathways. In addition, SIRPalpha can negatively regulate the phagocytosis of host cells by macrophages, indicating an inhibitory role of SIRPalpha in innate immunity. We provide evidences that SIRPalpha is an essential endogenous regulator of the innate immune activation upon lipopolysaccharide (LPS) exposure. SIRPalpha expression was promptly reduced in macrophages after LPS stimulation. The decrease in SIRPalpha expression levels was required for initiation of LPS-induced innate immune responses because overexpression of SIRPalpha reduced macrophage responses to LPS. Knockdown of SIRPalpha caused prolonged activation of MAPKs and NF-kappaB pathways and augmented production of proinflammatory cytokines and type I interferon (IFN). Mice transferred with SIRPalpha-depleted macrophages were highly susceptible to endotoxic shock, developing multiple organ failure and exhibiting a remarkable increase in mortality. SIRPalpha may accomplish this mainly through its association and sequestration of the LPS signal transducer SHP-2. Thus, SIRPalpha functions as a biologically important modulator of TLR signaling and innate immunity.