TIPE2 (TNF-α-induced protein 8-like 2) is a novel death effector domain protein and is a negative regulator of the innate and adaptive immune response. Although it has been demonstrated that caspase-8 contributes to the negative regulation of TIPE2, the negative regulatory mechanism is not entirely understood. Here, we demonstrate that TIPE2 interacts with TGF-β-activated kinase 1 (TAK1), a crucial regulatory molecule of inflammatory and immune signals, and consequently acts as a powerful negative regulator of TAK1. The interaction between endogenous TIPE2 and TAK1 was observed in RAW264.7 macrophage-like cells and mouse primary cells derived from spleen and thymus. The TIPE2 amino acid 101-140 region interacted with TAK1 by binding to the amino acid 200-291 region of the internal kinase domain of TAK1. TIPE2 interfered with the formation of the TAK1-TAB1-TAB2 complex and subsequently inhibited activation of TAK1 and its downstream molecules. Importantly, silencing TIPE2 through RNA interference attenuated the inhibitory action of TIPE2 on LPS- and TNF-α-stimulated TAK1 activity. Exogenous TIPE2 101-140, the region that interacts with TAK1, also inhibited LPS- and TNF-α-stimulated NF-κB reporter activity. Interestingly, cell-permeable TIPE2 protein maintained its binding ability with TAK1 and exhibited the same inhibitory action of native TIPE2 on TLR4 signaling in vitro Thus, cell-permeable TIPE2 protein is a potential candidate for intracellular protein therapy for TAK1-related diseases. The present study demonstrates that TIPE2 acts as a novel negative regulator of inflammatory and immune responses through TAK1 signaling.