Following immune reconstitution, hematopoietic stem cell transplant patients often display reduced immune function and are especially susceptible to lung infections. In a mouse model of syngeneic bone marrow transplantation (BMT), we previously reported that PGE(2) is overproduced in lungs of BMT mice, significantly impairing host defense against Pseudomonas aeruginosa. This impairment in host defense post-BMT is also marked by diminished alveolar macrophage (AM) phagocytosis, bacterial killing, and production of TNF-alpha and cysteinyl leukotrienes. However, a mechanism by which overproduction of PGE(2) suppresses pulmonary host defense post-BMT is unknown. As IL-1R-associated kinase (IRAK)-M is a known inhibitor of MyD88-dependent IL-1R/TLR signaling and macrophage function, we sought to determine whether IRAK-M is involved in PGE(2)-induced immunosuppression post-BMT. We found that IRAK-M expression is elevated 3.5-fold in BMT AMs relative to control AMs, and this is related to AM overproduction of PGE(2). Furthermore, genetic ablation of IRAK-M in the bone marrow of BMT mice restores host defense against P. aeruginosa. Despite AM overproduction of PGE(2) and elevated E prostanoid 2 receptor expression, AM phagocytosis, killing, and production of cysteinyl leukotrienes and TNF-alpha are restored in the absence of IRAK-M post-BMT. Also, treatment with PGE(2) does not inhibit AM phagocytosis in the absence of IRAK-M. These data suggest that the absence of IRAK-M in the hematopoietic compartment post-BMT enhances pulmonary host defense and mitigates AM sensitivity to the inhibitory effects of PGE(2). Therefore, strategies to limit IRAK-M elevation post-BMT may be efficacious in reducing patient susceptibility to infection.