It is estimated that 1 billion people around the world are vitamin D deficient. Vitamin D deficiency has been linked to various inflammatory diseases. However, the mechanism by which vitamin D reduces inflammation remains poorly understood. In this study, we investigated the inhibitory effects of physiologic levels of vitamin D on LPS-stimulated inflammatory response in human blood monocytes and explored potential mechanisms of vitamin D action. We observed that two forms of the vitamin D, 1, 25 (OH) 2 D 3, and 25 (OH) D 3, dose dependently inhibited LPS-induced p38 phosphorylation at physiologic concentrations, IL-6 and TNF-α production by human monocytes. Upon vitamin D treatment, the expression of MAPK phosphatase-1 (MKP-1) was significantly upregulated in human monocytes and murine bone marrow-derived macrophages (BMM). Increased binding of the vitamin D receptor and increased histone H4 acetylation at the identified vitamin D response element of the murine and human MKP-1 promoters were demonstrated. Moreover, in BMM from MKP1−/− mice, the inhibition of LPS-induced p38 phosphorylation by vitamin D was completely abolished. Vitamin D inhibition of LPS-induced IL-6 and TNF-α production by BMM from MKP-1−/− mice was significantly reduced as compared with wild-type mice. In conclusion, this study identified the upregulation of MKP-1 by vitamin D as a novel pathway by which vitamin D inhibits LPS-induced p38 activation and cytokine production in monocytes/macrophages.