11 beta-Hydroxysteroid dehydrogenase type I (11 beta HSD1) performs end-organ metabolism of glucocorticoids (GCs) by catalyzing the conversion of C-11-keto-GCs to C-11-hydroxy-GCs, thereby generating activating ligands for the GC receptor. In this study, we report that 11 beta HSD1(-/-) mice are more susceptible to endotoxemia, evidenced by increased weight loss and serum TNF-alpha, IL-6, and IL-12p4O levels following LPS challenge in vivo. Peritoneal and splenic macrophage (spInM Phi) from these genetically altered mice overproduce inflammatory cytokines following LPS stimulation in vitro. Inflammatory cytokine overexpression by 11 beta HSD1(-/-) spinMo results from an increased activation of NF-kappa B- and MAPK-signaling cascades and an attenuated PI3Kdependent Akt activation. The expression of SHIN is augmented in 11 beta HSD1(-/-) M(P and contributes to inflammatory cytokine production because overexpression of SHIN in primary bone marrow M Phi (BMM Phi) leads to a similar type of hyperresponsiveness to subsequent LPS stimulation. 11 beta HSD1(-/-) and 11 beta HSD1(-/-) BMM(A responded to LPS similarly. However, 11 beta HSD1(-/-)BMM(A derived in the presence of elevated GC levels up-regulated SHIN expression and increased their capacity to produce inflammatory cytokines following their activation with LPS. These observations suggest the hyperresponsiveness of 11 beta HSD1(-/-)splnM Phi results from myeloid cell differentiation in the presence of moderately elevated GC levels found within 11 beta HSD1(-/-) mice. GC-conditioning of BMM Phi enhanced SHIN expression via up-regulation of bioactive TGF-beta. Consistently, TGF-beta protein expression was increased in unstimulated CD11b(-) cells residing in the BM and spleen of 11 beta HSD1(-/-) mice. Our results suggest that modest elevations in plasma GC levels can modify the LPS responsiveness of M Phi by augmenting SHIN expression through a TGF-beta-dependent mechanism.