Loss of peroxisome proliferator-activated receptor (PPAR)-γ function in the vascular endothelium enhances atherosclerosis and NF-κB target gene expression in high-fat diet-fed apolipoprotein E-deficient mice. The mechanisms by which endothelial PPAR-γ regulates inflammatory responses and protects against atherosclerosis remain unclear. To assess functional interactions between PPAR-γ and inflammation, we used a model of IL-1β-induced aortic dysfunction in transgenic mice with endothelium-specific overexpression of either wild-type (E-WT) or dominant negative PPAR-γ (E-V290M). IL-1β dose dependently decreased IκB-α, increased phospho-p65, and increased luciferase activity in the aorta of NF-κB-LUC transgenic mice. IL-1β also dose dependently reduced endothelial-dependent relaxation by ACh. The loss of ACh responsiveness was partially improved by pretreatment of the vessels with the PPAR-γ agonist rosiglitazone or in E-WT. Conversely, IL-1β-induced endothelial dysfunction was worsened in the aorta from E-V290M mice. Although IL-1β increased the expression of NF-κB target genes, NF-κB p65 inhibitor did not alleviate endothelial dysfunction induced by IL-1β. Tempol, a SOD mimetic, partially restored ACh responsiveness in the IL-1β-treated aorta. Notably, tempol only modestly improved protection in the E-WT aorta but had an increased protective effect in the E-V290M aorta compared with the aorta from nontransgenic mice, suggesting that PPAR-γ-mediated protection involves antioxidant effects. IL-1β increased ROS and decreased the phospho-endothelial nitric oxide synthase (Ser¹¹⁷⁷)-to-endothelial nitric oxide synthase ratio in the nontransgenic aorta. These effects were completely abolished in the aorta with endothelial overexpression of WT PPAR-γ but were worsened in the aorta with E-V290M even in the absence of IL-1β. We conclude that PPAR-γ protects against IL-1β-mediated endothelial dysfunction through a reduction of oxidative stress responses but not by blunting IL-1β-mediated NF-κB activity.