The binding of immune complexes to macrophage Fcgamma receptor results in a subsequent inhibition of lipopolysaccharide-stimulated interleukin-12 synthesis without affecting the induction of tumor necrosis factor-alpha. RNA interference targeting MAST205, a 205-kDa serine/threonine kinase, and transfection of dominant negative MAST205 mutants also mimic this type II macrophage phenotype. Our previous epistasis experiments suggested that the position of MAST205 in the TLR4 signal pathway was proximal to the IkappaB kinase complex. We now report that MAST205 forms a complex with TRAF6, resulting in the inhibition of TRAF6 NF-kappaB activation. We have identified a peptide (residues 218-233) from the N terminus of MAST205 that, when coupled to a protein transduction domain, inhibits the lipopolysaccharide-stimulated activation of NF-kappaB, modulates the size of the MAST205.TRAF6 complex, and inhibits ubiquitination of TRAF6. A dominant negative N-terminal MAST205 deletion mutant also inhibits TRAF6 ubiquitination. The domain required for degradation of MAST205 after Fcgamma receptor activation resides within the N-terminal 261 residues, and degradation is triggered by protein kinase C isoform phosphorylation of Ser/Thr residues. These results suggest that MAST205 functions as a scaffolding protein controlling TRAF6 activity and, therefore, plays an important role in regulating inflammatory responses.