The molecular basis responsible for tolerance following inflammatory response to lipopolysaccharide (LPS) is not well understood. We hypothesized that inflammation/tolerance in monocytes/ macrophages is dependent on the proteases of proteasome. To test our hypothesis, first, we examined the expression of different proteasome subunits in different human and mouse monocytes/macrophages. Secondly, we investigated the effect of proteasome subunits/ proteases on LPS-induced expression of tumor necrosis factor-α (TNF-α) and nitric oxide (NO) during inflammation and tolerance using mouse RAW 264.7 macrophages, THP1 cells, and cluster of differentiation 14 positive (CD14+) human monocytes. We found that RAW 264.7 cells (XYZ), mouse peritoneal resident, thioglycollate-elicited macrophages, primed RAW 264.7 (XYZ, LMP), and human monocytes (LMP) expressed different types of proteasome subunits/activities. Cells containing predominantly either LMP subunits (such as THP-1 and human monocytes), or only X, Y, Z subunits (RAW 264.7 cells not primed) could only induce TNF-α, but not NO, while cells containing all five to six subunits (XYZ, LMP) of the proteasome could induce both mediators in response to LPS. Distinct states of inflammation/tolerance in LPS treated cells, strongly correlated with an upregulation or downregulation of proteasome's subunits (proteases), respectively. Moreover, interferon-γ treatment of tolerant cells caused robust induction of proteasome's subunit expression in mouse macrophages and human monocytes, and cells regained their ability to respond to LPS. These studies are vital for understanding function of proteasome's subunits during inflammation/tolerance in mouse and human cells, and for design of therapeutic strategies for all diseases based on inflammation.