Fps/Fes and Fer are members of a distinct subfamily of cytoplasmic protein tyrosine kinases that have recently been implicated in the regulation of innate immunity. Previous studies showed that mice lacking Fps/Fes are hypersensitive to systemic LPS challenge, and Fer-deficient mice displayed enhanced recruitment of leukocytes in response to local LPS challenge. This study identifies physiological, cellular, and molecular defects that contribute to the hyperinflammatory phenotype in Fps/Fes null mice. Plasma TNF-alpha levels were elevated in LPS challenged Fps/Fes null mice as compared with wild-type mice and cultured Fps/Fes null peritoneal macrophages treated with LPS showed increased TNF-alpha production. Cultured Fps/Fes null macrophages also displayed prolonged LPS-induced degradation of IkappaB-alpha, increased phosphorylation of the p65 subunit of NF-kappaB, and defective TLR4 internalization, compared with wild-type macrophages. Together, these observations provide a likely mechanistic basis for elevated proinflammatory cytokine secretion by Fps/Fes null macrophages and the increased sensitivity of Fps/Fes null mice to endotoxin. We posit that Fps/Fes modulates the innate immune response of macrophages to LPS, in part, by regulating internalization and down-regulation of the TLR4 receptor complex.