DUSP3 is a small dual-specificity protein phosphatase with an unknown physiological function. We report that DUSP3 is strongly expressed in human and mouse monocytes and macrophages, and that its deficiency in mice promotes tolerance to LPS-induced endotoxin shock and to polymicrobial septic shock after cecal ligation and puncture. By using adoptive transfer experiments, we demonstrate that resistance to endotoxin is macrophage dependent and transferable, and that this protection is associated with a striking increase of M2-like macrophages in DUSP3−/− mice in both the LPS and cecal ligation and puncture models. We show that the altered response of DUSP3−/− mice to sepsis is reflected in decreased TNF production and impaired ERK1/2 activation. Our results demonstrate that DUSP3 plays a key and nonredundant role as a regulator of innate immune responses by mechanisms involving the control of ERK1/2 activation, TNF secretion, and macrophage polarization.