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Sinusoidal endothelial cells and Kupffer cells are the first cell populations in the liver that come into contact with gut-derived endotoxin in portal blood. Although endotoxin concentrations as high as 1 ng/ml are physiologically present in portal blood, no local inflammation is seen. We show that the proinflammatory cytokine IL-6, which is central to the development of inflammatory reactions in the liver, is produced by sinusoidal endothelial cells and Kupffer cells in response to low concentrations of endotoxin (100 pg/ml to 1 ng/ml). The anti-inflammatory cytokine IL-10 down-regulated endotoxin-induced IL-6 release in endothelial and Kupffer cells. Importantly, Kupffer cells secreted IL-10 after endotoxin stimulation and may therefore participate in the local regulation of inflammation. We have found that IL-6 secretion in Kupffer cells is tightly regulated by endogenous IL-10, because increased IL-6 secretion resulted when neutralizing antibodies to IL-10 were added to resting and endotoxin-challenged Kupffer cells. Furthermore, repeated exposure of endothelial cells to endotoxin induced a state of tolerance which resulted in decreased release of IL-6 in response to a second endotoxin challenge. Our results support the notion that inflammatory reactions in the liver in response to endotoxin are down-regulated by local release of the anti-inflammatory cytokine IL-10 that is produced by Kupffer cells.