Inhalation of environmental antigens such as allergens does not always induce inflammation in the respiratory tract. While antigen-presenting cells (APCs), including dendritic cells and macrophages, take up inhaled antigens, the cell-intrinsic molecular mechanisms that prevent an inflammatory response during this process, such as activation of the transcription factor NF-κB, are not well understood. Here, we show that the nuclear receptor PPARγ plays a critical role in blocking NF-κB activation in response to inhaled antigens to preserve immune tolerance. Tolerance induction promoted mitochondrial respiration, generation of H₂O₂, and suppression of NF-κB activation in WT, but not PPARγ-deficient, APCs. Forced restoration of H₂O₂ in PPARγ-deficient cells suppressed IκBα degradation and NF-κB activation. Conversely, scavenging reactive oxygen species from mitochondria promoted IκBα degradation with loss of regulatory and promotion of inflammatory T cell responses in vivo. Thus, communication between PPARγ and the mitochondria maintains immune quiescence in the airways.