IL-18 is a member of the IL-1 family involved in innate immunity and inflammation. Deregulated levels of IL-18 are involved in the pathogenesis of multiple disorders including inflammatory and metabolic diseases, yet relatively little is known regarding its regulation. Liver X receptors or LXRs are key modulators of macrophage cholesterol homeostasis and immune responses. Here we show that LXR ligands negatively regulate LPS-induced mRNA and protein expression of IL-18 in bone marrow-derived macrophages. Consistent with this being an LXR-mediated process, inhibition is abolished in the presence of a specific LXR antagonist and in LXR-deficient macrophages. Additionally, IL-18 processing of its precursor inactive form to its bioactive state is inhibited by LXR through negative regulation of both pro-caspase 1 expression and activation. Finally, LXR ligands further modulate IL-18 levels by inducing the expression of IL-18BP, a potent endogenous inhibitor of IL-18. This regulation occurs via the transcription factor IRF8, thus identifying IL-18BP as a novel LXR and IRF8 target gene. In conclusion, LXR activation inhibits IL-18 production through regulation of its transcription and maturation into an active pro-inflammatory cytokine. This novel regulation of IL-18 by LXR could be applied to modulate the severity of IL-18 driven metabolic and inflammatory disorders.