TLRs are essential for sensing the invading pathogens and initiating protective immune responses. However, aberrant activation of TLR-triggered inflammatory innate responses leads to the inflammatory disorders and autoimmune diseases. The molecular mechanisms that fine-tune TLR responses remain to be fully elucidated. Protein tyrosine phosphatase with proline-glutamine-serine-threonine-rich motifs (PTP-PEST) has been shown to be important in cell adhesion, migration, and also T cell and B cell activation. However, the roles of PTP-PEST in TLR-triggered immune response remain unclear. In this study, we report that PTP-PEST expression was upregulated in macrophages by TLR ligands. PTP-PEST inhibited TNF-alpha, IL-6, and IFN-beta production in macrophages triggered by TLR3, TLR4, and TLR9. Overexpression of catalytically inactive mutants of PTP-PEST abolished the inhibitory effects, indicating that PTP-PEST inhibits TLR response in a phosphatase-dependent manner. Accordingly, PTP-PEST knockdown increased TLR3, -4, and -9-triggered proinflammatory cytokine and type I IFN production. PTP-PEST selectively inhibited TLR-induced NF-kappaB activation, whereas it had no substantial effect on MAPK and IFN regulatory factor 3 activation. Moreover, PTP-PEST directly interacted with IkappaB kinase beta (IKKbeta) then inhibited IKKbeta phosphorylation at Ser(177/181) and Tyr(188/199), and subsequently suppressed IKKbeta activation and kinase activity as well as downstream NF-kappaB activation, resulting in suppression of the TLR-triggered innate immune response. Thus, PTP-PEST functions as a feedback-negative regulator of TLR-triggered innate immune responses by selectively impairing IKKbeta/NF-kappaB activation.