Peroxisome proliferator-activated receptor (PPAR)gamma ligands are known to have anti-inflammatory properties that include the inhibition of cytokine signaling, transcription factor activation, and inflammatory gene expression. We have recently observed that increased expression of heat shock protein (HSP)70 correlates with, but is not required for, the anti-inflammatory actions of PPARgamma ligands on cytokine signaling. In this study, we provide evidence that the inhibitory actions of PPARgamma ligands on cytokine signaling are associated with endoplasmic reticulum (ER) stress or unfolded protein response (UPR) activation in pancreatic beta-cells. 15-Deoxy-Delta(12,14)-prostaglandin J(2), at concentrations that inhibit cytokine signaling, stimulates phosphorylation of eukaryotic initiation factor-2alpha, and this event is followed by a rapid inhibition of protein translation. Under conditions of impaired translation, PPARgamma ligands stimulate the expression of a number of ER stress-responsive genes, such as GADD 153, BiP, and HSP70. Importantly, ER stress activation in response to PPARgamma ligands or known UPR activators results in the attenuation of IL-1 and IFN-gamma signaling. These findings indicate that PPARgamma ligands induce ER stress, that ER stress activation is associated with an attenuation of cytokine signaling in beta-cells, and that the attenuation of responsiveness to extracellular stimuli appears to be a novel protective action of the UPR in cells undergoing ER stress.