© Ito et al. The liver X receptors (LXRs) are transcriptional regulators of lipid homeostasis that also have potent anti-inflammatory effects. The molecular basis for their anti-inflammatory effects is incompletely understood, but has been proposed to involve the indirect tethering of LXRs toinflammatory gene promoters. Here we demonstrate that the ability of LXRs to repress inflammatory gene expression in cells and mice derives primarily from their ability to regulate lipid metabolism through transcriptional activation and can occur in the absence of SUMOylation. Moreover, we identify the putative lipid transporter Abca1 as a critical mediator of LXR’s anti-inflammatory effects. Activation of LXR inhibits signaling from TLRs 2, 4 and 9 to their downstream NF-κB and MAPK effectors through Abca1-dependent changes in membrane lipid organization that disrupt the recruitment of MyD88 and TRAF6. These data suggest that a common mechanism-direct transcriptional activation-underlies the dual biological functions of LXRs in metabolism and inflammation.