LRP1 is a type-1 transmembrane receptor that mediates the endocytosis of diverse ligands. LRP1 β-chain proteolysis results in release of sLRP1 that is present in human plasma. In this study, we show that LPS and IFN-γ induce shedding of LRP1 from RAW 264.7 cells and BMMs in vitro. ADAM17 was principally responsible for the increase in LRP1 shedding. sLRP1 was also increased in vivo in mouse plasma following injection of LPS and in plasma from human patients with RA or SLE. sLRP1, which was purified from human plasma, and full-length LRP1, purified from mouse liver, activated cell signaling when added to cultures of RAW 264.7 cells and BMMs. Robust activation of p38 MAPK and JNK was observed. The IKK-NF-κB pathway was transiently activated. Proteins that bind to the ligand-binding clusters in LRP1 failed to inhibit sLRP1-initiated cell signaling, however an antibody that targets the sLRP1 N terminus was effective. sLRP1 induced expression of regulatory cytokines by RAW 264.7 cells, including TNF-α, MCP-1/CCL2, and IL-10. These results demonstrate that sLRP1 is generated in inflammation and may regulate inflammation by its effects on macrophage physiology.