Mitogen-activated protein (MAP) kinase cascades are crucial signal transduction pathways in the regulation of the host inflammatory response to infection. MAP kinase phosphatase (MKP)-1, an archetypal member of the MKP family, plays a pivotal role in the deactivation of p38 and JNK. In vitro studies using cultured macrophages have provided compelling evidence for a central role of MKP-1 in the restraint of pro-inflammatory cytokine biosynthesis. Studies using MKP-1 knockout mice have strengthened the findings from in vitro studies and defined the critical importance of MKP-1 in the regulation of pro-inflammatory cytokine synthesis in vivo during the host response to bacterial cell wall components. Upon challenge with Toll-like receptor ligands MKP-1 knockout mice produced dramatically greater amounts of inflammatory cytokines, developed severe hypotension and multi-organ failure, and exhibited a remarkable increase in mortality. More recent investigations using intact bacteria confirmed these observations and further revealed novel functions of MKP-1 in host defense against bacterial infection. These studies demonstrate that MKP-1 is an essential feedback regulator of the innate immune response, and that it plays a critical role in preventing septic shock and multi-organ dysfunction during pathogenic infection. In this review, we will summarize the studies on the function of MKP-1 in innate immune responses and discuss the regulation of this novel protein phosphatase.