MAPK phosphatase (MKP)-1 is an archetypal member of the dual specificity protein phosphatase family that dephosphorylates MAPK. We have previously demonstrated that MKP-1 acts as a negative regulator of p38 and JNK in immortalized macrophages after stimulation with peptidoglycan isolated from Gram-positive bacteria. To define the physiological function of MKP-1 during Gram-positive bacterial infection, we studied the innate immune responses to Gram-positive bacteria using Mkp-1 knockout (KO) mice. We found that Mkp-1(-/-) macrophages exhibited prolonged activation of p38 and JNK, but not of ERK, following exposure to either peptidoglycan or lipoteichoic acid. Compared with wild-type (WT) macrophages, Mkp-1(-/-) macrophages produced more proinflammatory cytokines such as TNF-alpha and IL-6. Moreover, after challenge with peptidoglycan, lipoteichoic acid, live or heat-killed Staphylococcus aureus bacteria, Mkp-1 KO mice also mounted a more robust production of cytokines and chemokines, including TNF-alpha, IL-6, IL-10, and MIP-1alpha, than did WT mice. Accordingly, Mkp-1 KO mice also exhibited greater NO production, more robust neutrophil infiltration, and more severe organ damage than did WT mice. Surprisingly, WT and Mkp-1 KO mice exhibited no significant difference in either bacterial load or survival rates when infected with live S. aureus. However, in response to challenge with heat-killed S. aureus, Mkp-1 KO mice exhibited a substantially higher mortality rate compared with WT mice. Our studies indicate that MKP-1 plays a critical role in the inflammatory response to Gram-positive bacterial infection. MKP-1 serves to limit the inflammatory reaction by inactivating JNK and p38, thus preventing multiorgan failure caused by exaggerated inflammatory responses.