Many members of the nucleotide-binding and oligomerization domain (NOD)- and leucine-rich-repeat-containing protein (NLR) family play important roles in pathogen recognition and inflammation. However, we previously reported that human PYNOD/NLRP10, an NLR-like protein consisting of a pyrin domain and a NOD, inhibits inflammatory signal mediated by caspase-1 and apoptosis-associated speck-like protein containing a caspase recruitment domain (ASC) in reconstitution experiments using HEK293 cells. In this study, we investigated the molecular mechanism of PYNOD's anti-inflammatory activity in vitro and its expression and function in mice. Human PYNOD inhibited the autoprocessing of caspase-1 and caspase-1-mediated IL-1beta processing and suppressed the aggregation of ASC, a hallmark of ASC activation. Interestingly, the NOD of human PYNOD was sufficient to inhibit caspase-1-mediated IL-1beta secretion, whereas its pyrin domain was sufficient to inhibit ASC-mediated NF-kappaB activation and apoptosis and to reduce ASC's ability to promote caspase-1-mediated IL-1beta production. Mouse PYNOD protein was detected in the skin, tongue, heart, colon, peritoneal macrophages, and several cell lines of hematopoietic and myocytic lineages. Mouse PYNOD colocalized with ASC aggregates in LPS + R837-stimulated macrophages; however, unlike human PYNOD, mouse PYNOD failed to inhibit ASC aggregation. Macrophages and neutrophils from PYNOD-transgenic mice exhibited reduced IL-1beta processing and secretion upon microbial infection, although mouse PYNOD failed to inhibit caspase-1 processing, which was inhibited by caspase-4 inhibitor z-LEED-fluoromethylketone. These results suggest that mouse PYNOD colocalizes with ASC and inhibits caspase-1-mediated IL-1beta processing without inhibiting caspase-4 (mouse caspase-11)-mediated caspase-1 processing. Furthermore, PYNOD-transgenic mice were resistant to lethal endotoxic shock. Thus, PYNOD is the first example of an NLR that possesses an anti-inflammatory function in vivo.