The pro‐inflammatory cytokine macrophage migration inhibitory factor (MIF) acts as a physiological counter‐regulator of the immuno‐suppressive effects of glucocorticoids. However, the mechanisms whereby MIF exerts its counter‐balancing effect remain largely unknown. Here we report that MAPK phosphatase 1 (MKP‐1), an archetypal member of dual specificity phosphatase that inactivates MAPK activity in response to pro‐inflammatory stimuli, is a critical target of MIF‐glucocorticoid crosstalk. Recombinant MIF counter‐regulated in a dose‐dependent fashion dexamethasone inhibition of TNF and IL‐8 production by RAW 264.7 macrophages and U‐937 promonocytes stimulated with lipoplysaccharides (LPS) or with LPS plus phorbol 12‐myristate 13‐acetate. Stimulation of RAW 264.7 macrophages with dexamethasone or dexamethasone plus LPS led to a robust up‐regulation of MKP‐1 mRNA and protein expressions that were counter‐regulated by addition of recombinant MIF. Antisense MIF macrophages expressing reduced levels of endogenous MIF produced higher amount of MKP‐1 and lower amount of TNF after exposure to dexamethasone and dexamethasone plus LPS, indicating that endogenous MIF acts in an autocrine fashion to override glucocorticoid‐induced MKP‐1 expression and inhibition of cytokine production. Taken together, these data identify MKP‐1 as a molecular target of MIF‐glucocorticoid crosstalk and provide a molecular basis for the control of macrophage responses by a pair of physiological regulators of innate immunity. See accompanying commentary: http://dx.doi.org/10.1002/eji.200535556