The E3 ubiquitin ligase Cblb has a crucial role in the prevention of chronic inflammation and autoimmunity. Here we show that Cblb also has an unexpected function in acute lung inflammation. Cblb attenuates the sequestration of inflammatory cells in the lungs after administration of lipopolysaccharide (LPS). In a model of polymicrobial sepsis in which acute lung inflammation depends on the LPS receptor (Toll-like receptor 4, TLR-4), the loss of Cblb expression accentuates acute lung inflammation and reduces survival. Loss of Cblb significantly increases sepsis-induced release of inflammatory cytokines and chemokines. Cblb controls the association between TLR4 and the intracellular adaptor MyD88. Expression of wild-type Cblb, but not expression of a Cblb mutant that lacks E3 ubiquitin ligase function, prevents the activity of a reporter gene for the transcription factor nuclear factor-κB (NF-κB) in monocytes that have been challenged with LPS. The downregulation of TLR4 expression on the cell surface of neutrophils is impaired in the absence of Cblb. Our data reveal that Cblb regulates the TLR4-mediated acute inflammatory response that is induced by sepsis.