IL-10 is a strong inhibitor of macrophage (M(phi)) activation and inflammatory cytokine and chemokine production. To gain insight into mechanisms by which IL-10 suppresses inflammation, we performed a kinetic analysis of IL-10-induced gene expression in primary human M(phi). IL-10 induced rapid and transient expression of genes encoding transcription factors, followed by sustained elevation or suppression of gene expression. IL-10 suppressed basal expression of interferon-inducible genes, suggesting that IL-10 interrupts autocrine interferon-mediated priming. IL-10 induced the expression of prostaglandin dehydrogenase (PGDH), the major catabolic enzyme involved in prostaglandin degradation. Concomitant with PGDH expression, IL-10 induced increased degradation of the inflammatory PGE2 and suppressed PGE2-mediated effects on M(phi) morphology and gene expression. These results identify catabolism of inflammatory PGs as a mechanism of IL-10 anti-inflammatory action.