IRAK-4 is an essential component of the signal transduction complex downstream of the IL-1- and Toll-like receptors. Although regarded as the first kinase in the signaling cascade, the role of IRAK-4 kinase activity versus its scaffold function is still controversial. To investigate the role of IRAK-4 kinase function in vivo, "knock-in" mice were generated by replacing the wild type IRAK-4 gene with a mutant gene encoding kinase-deficient IRAK-4 protein (IRAK-4 KD). IRAK-4 kinase was rendered inactive by mutating the conserved lysine residues in the ATP pocket essential for coordinating ATP. Analyses of embryonic fibroblasts and macrophages obtained from IRAK-4 KD mice demonstrate lack of cellular responsiveness to stimulation with IL-1beta or a Toll-like receptor 7 (TLR7) agonist. IRAK-4 kinase deficiency prevents the recruitment of IRAK-1 to the IL-1 receptor complex and its subsequent phosphorylation and degradation. IRAK-4 KD cells are severely impaired in NFkappaB, JNK, and p38 activation in response to IL-1beta or TLR7 ligand. As a consequence, IL-1 receptor/TLR7-mediated production of cytokines and chemokines is largely absent in these cells. Additionally, microarray analysis identified IL-1beta response genes and revealed that the induction of IL-1beta-responsive mRNAs is largely ablated in IRAK-4 KD cells. In summary, our results suggest that IRAK-4 kinase activity plays a critical role in IL-1 receptor (IL-1R)/TLR7-mediated induction of inflammatory responses.