P2X₇ receptor is an adenosine triphosphate (ATP)‐gated ion channel within the multiprotein inflammasome complex. Until now, little is known about regulation of P2X₇ effector functions in macrophages. In this study, we show that nucleoside triphosphate diphosphohydrolase 1 (NTPDase1)/CD39 is the dominant ectonucleotidase expressed by murine peritoneal macrophages and that it regulates P2X₇‐dependent responses in these cells. Macrophages isolated from NTPDase1‐null mice (Entpd1^−/−) were devoid of all ADPase and most ATPase activities when compared with WT macrophages (Entpd1^+/+). Entpd1^−/− macrophages exposed to millimolar concentrations of ATP were more susceptible to cell death, released more IL‐1β and IL‐18 after TLR2 or TLR4 priming, and incorporated the fluorescent dye Yo‐Pro‐1 more efficiently (suggestive of increased pore formation) than Entpd1^+/+ cells. Consistent with these observations, NTPDase1 regulated P2X₇‐associated IL‐1β release after synthesis, and this process occurred independently of, and prior to, cytokine maturation by caspase‐1. NTPDase1 also inhibited IL‐1β release in vivo in the air pouch inflammatory model. Exudates of LPS‐injected Entpd1^−/− mice had significantly higher IL‐1β levels when compared with Entpd1^+/+ mice. Altogether, our studies suggest that NTPDase1/CD39 plays a key role in the control of P2X₇‐dependent macrophage responses.