Tle1 (transducin-like enhancer of split 1) is a corepressor that interacts with a variety of DNA-binding transcription factors and has been implicated in many cellular functions; however, physiological studies are limited. Tle1-deficient (Tle1(Δ/Δ)) mice, although grossly normal at birth, exhibit skin defects, lung hypoplasia, severe runting, poor body condition, and early mortality. Tle1(Δ/Δ) mice display a chronic inflammatory phenotype with increased expression of inflammatory cytokines and chemokines in the skin, lung, and intestine and increased circulatory IL-6 and G-CSF, along with a hematopoietic shift toward granulocyte macrophage progenitor and myeloid cells. Tle1(Δ/Δ) macrophages produce increased inflammatory cytokines in response to Toll-like receptor (TLR) agonists and lipopolysaccharides (LPS), and Tle1(Δ/Δ) mice display an enhanced inflammatory response to ear skin 12-O-tetradecanoylphorbol-13-acetate treatment. Loss of Tle1 not only results in increased phosphorylation and activation of proinflammatory NF-κB but also results in decreased Hes1 (hairy and enhancer of split-1), a negative regulator of inflammation in macrophages. Furthermore, Tle1(Δ/Δ) mice exhibit accelerated growth of B6-F10 melanoma xenografts. Our work provides the first in vivo evidence, to our knowledge, that TLE1 is a major counterregulator of inflammation with potential roles in a variety of inflammatory diseases and in cancer progression.