Immunotherapy is revolutionizing cancer treatment but is often restricted by toxicities. What distinguishes adverse events from concomitant antitumor reactions is poorly understood. Here, using anti-CD40 treatment in mice as a model of TH1-promoting immunotherapy, we showed that liver macrophages promoted local immune-related adverse events. Mechanistically, tissue-resident Kupffer cells mediated liver toxicity by sensing lymphocyte-derived IFN-γ and subsequently producing IL-12. Conversely, dendritic cells were dispensable for toxicity but drove tumor control. IL-12 and IFN-γ were not toxic themselves but prompted a neutrophil response that determined the severity of tissue damage. We observed activation of similar inflammatory pathways after anti-PD-1 and anti-CTLA-4 immunotherapies in mice and humans. These findings implicated macrophages and neutrophils as mediators and effectors of aberrant inflammation in TH1-promoting immunotherapy, suggesting distinct mechanisms of toxicity and antitumor immunity.