Little is known about the role of viral genes in modulating host cytokine responses. Here we report a new functional role of the viral encoded IE1 protein of the murine cytomegalovirus in sculpting the inflammatory response in an acute infection. In time course experiments of infected primary macrophages (MΦs) measuring cytokine production levels, genetic ablation of the immediate-early 1 (ie1) gene results in a significant increase in TNFα production. Intracellular staining for cytokine production and viral early gene expression shows that TNFα production is highly associated with the productively infected MΦ population of cells. The ie1- dependent phenotype of enhanced MΦ TNFα production occurs at both protein and RNA levels. Noticeably, we show in a series of in vivo infection experiments that in multiple organs the presence of ie1 potently inhibits the pro-inflammatory cytokine response. From these experiments, levels of TNFα, and to a lesser extent IFNβ, but not the anti-inflammatory cytokine IL10, are moderated in the presence of ie1. The ie1- mediated inhibition of TNFα production has a similar quantitative phenotype profile in infection of susceptible (BALB/c) and resistant (C57BL/6) mouse strains as well as in a severe immuno-ablative model of infection. In vitro experiments with infected macrophages reveal that deletion of ie1 results in increased sensitivity of viral replication to TNFα inhibition. However, in vivo infection studies show that genetic ablation of TNFα or TNFRp55 receptor is not sufficient to rescue the restricted replication phenotype of the ie1 mutant virus. These results provide, for the first time, evidence for a role of IE1 as a regulator of the pro-inflammatory response and demonstrate a specific pathogen gene capable of moderating the host production of TNFα in vivo.