Gpbar1 (TGR5), a membrane-bound bile acid receptor, is well known for its roles in regulation of energy homeostasis and glucose metabolism. TGR5 also displays strong attenuation of macrophage reactivity in vitro, but the physiological roles of TGR5 in inflammatory response, and its mechanism, is unknown. Here, we demonstrate that TGR5 is a negative modulator of nuclear factor kappa light-chain enhancer of activated B cells (NF-κB)-mediated inflammation. TGR5 activation suppresses the phosphorylation of nuclear factor of kappa light polypeptide gene enhancer in B-cells inhibitor, alpha (IκBα), the translocation of p65, NF-κB DNA-binding activity, and its transcription activity. Furthermore, TGR5 activation enhances the interaction of IκBα and β-arrestin2. Suppression of NF-κB transcription activity and its target gene expression by TGR5 agonist are specifically abolished by the expression of anti-β-arrestin2 small interfering RNA. These results show that TGR5 suppresses the NF-κB pathway by mediation of the interaction between IκBα and β-arrestin2. In a lipopolysaccharide (LPS)-induced inflammation model, TGR5−/− mice show more severe liver necroses and inflammation, compared with wild-type (WT) mice. Activation of TGR5 by its agonist ligand inhibits the expression of inflammatory mediators in response to NF-κB activation induced by LPS in WT, but not TGR5−/−, mouse liver. Conclusion: These findings identify TGR5 as a negative mediator of inflammation that may serve as an attractive therapeutic tool for immune and inflammatory liver diseases. (HEPATOLOGY 2011;)