The peroxisome proliferator‐activated receptor γ (PPARγ) is expressed in macrophages and plays an important role in suppressing the inflammatory response. Lipopolysaccharides (LPS), which activate Toll‐like receptor 4 (TLR4), reduced PPARγ expression and function in peritoneal macrophages and macrophage cell lines. Moreover, pretreatment with the synthetic PPARγ ligand, rosiglitazone did not prevent LPS‐mediated downregulation of PPARγ. Inhibition of PPARγ expression was not blocked by cycloheximide, indicating that de novo protein synthesis is not required for LPS‐mediated suppression of PPARγ. Destabilization of PPARγ messenger RNA (mRNA) was not observed in LPS‐stimulated macrophages, suggesting that LPS regulates the synthesis of PPARγ mRNA. LPS had no effect on PPARγ expression in macrophages from TLR4 knockout mice, whereas LPS inhibited PPARγ expression in cells that had been reconstituted to express functional TLR4. Targeting the TLR4 pathway with inhibitors of MEK1/2, p38, JNK and AP‐1 had no effect on PPARγ downregulation by LPS. However, inhibitors that target NEMO, IκB and NF‐κB abolished LPS‐mediated downregulation of PPARγ in LPS‐stimulated macrophages. Our data indicate that activation of TLR4 inhibits PPARγ mRNA synthesis by an NF‐κB‐dependent mechanism. Low‐density genomic profiling of macrophage‐specific PPARγ knockout cells indicated that PPARγ suppresses inflammation under basal conditions, and that loss of PPARγ expression is sufficient to induce a proinflammatory state. Our data reveal a regulatory feedback loop in which PPARγ represses NF‐κB‐mediated inflammatory signalling in unstimulated macrophages; however, upon activation of TLR4, NF‐κB drives down PPARγ expression and thereby obviates any potential anti‐inflammatory effects of PPARγ in LPS‐stimulated macrophages.