Apolipoprotein E (apoE) is a 299 amino acid protein that is associated with risk of developing Alzheimer's Disease (AD) and outcome after acute brain injury. To investigate the possibility that apoE modulates glial activation we studied the effect of endogenous apoE on inflammatory gene regulation in vitro and in vivo. Our results indicate that apoE downregulates CNS production of TNFalpha, Il-1beta, and Il-6 mRNA following stimulation with lipopolysaccharide (LPS). This effect of endogenous apoE on inflammatory gene regulation appears to be specific, and may account for the biological role that apoE plays in acute and chronic human neurological disease.