p21 is a cell‐cycle inhibitor that is also known to suppress autoimmunity. Here, we provide evidence of a novel role for p21 as an inhibitor of macrophage activation. LPS stimulation of p21‐deficient peritoneal macrophages induced increased activation compared with controls, with elevated production of proinflammatory mediators such as TNF‐α and IL‐1β. The enhanced activity of LPS‐stimulated p21‐deficient macrophages correlated with increased activity of the transcription factor NF‐κB. LPS stimulation of p21‐deficient macrophages led to increased IκBα kinase activity, and increased IκBα phosphorylation and degradation, resulting in elevated NF‐κB activity. The effect of p21 in macrophage activation was independent of its cell‐cycle inhibitory role. p21^−/− mice showed greater sensitivity to LPS‐induced septic shock than did WT mice, indicating that p21 contributes to maintenance of a balanced response to inflammatory stimuli and suggesting biological significance for the role of p21 in macrophage activation. Our findings project a role for p21 in the control of NF‐κB‐associated inflammation, and suggest that therapeutic modulation of p21 expression could be beneficial in inflammation‐associated diseases.