Polyunsaturated fatty acids (PUFA) have been shown to modulate immune responses and have therapeutic effects in inflammatory disorders. The specific mechanisms of their actions have yet to be defined. The objective of this work was to elucidate such mechanisms. Macrophages are a key component of the innate response, which express toll-like receptors (TLRs). Ligation of TLR4, by its ligand lipopolysaccharide (LPS), results in macrophage activation. This study demonstrates that the n-6 derivative, conjugated linoleic acid (CLA) and n-3 PUFA, DHA and EPA differentially modulate the response of macrophages to LPS. Specifically, phagocytosis was enhanced by CLA and suppressed by n-3 PUFA and these PUFA suppressed TNFα, IL-6 and enhanced IL-10 production, rendering the macrophage less inflammatory. PUFA also suppressed macrophage migration in response to LPS and inhibited production of chemokines. Furthermore, CLA inhibited activation of the TLR4 downstream transcription factors NF-κB and IRF3, while n-3 PUFA, DHA and EPA solely inhibited NF-κB. Further investigation revealed that PUFA selectively regulate the expression of TLR4 and its associated molecule CD14 in response to LPS, but had no effect on LPS binding to TLR4. The exact mechanism of the effects of PUFA on CD14 was elucidated by examining lipid raft 'microdomains', the location where the receptor complex clusters upon activation. We found that treatment of macrophages with CLA reduced the incorporation of CD14 into lipid rafts following activation with LPS. We then examined endocytosis of TLR4 given the role of CD14 in this process, and we found that it was suppressed by CLA. This study therefore reveals a novel mechanism whereby CLA exerts its antiinflammatory effects. This involves suppression of CD14, the subsequent suppression of TLR4 endocytosis culminating in decreased IRF3 activation.