Allergic asthma is a chronic lung disease initiated and driven by Th2 cytokines IL-4/-13. In macrophages, IL-4/-13 bind IL-4 receptors, which signal through insulin receptor substrate (IRS)-2, inducing M2 macrophage differentiation. M2 macrophages correlate with disease severity and poor lung function, although the mechanisms that regulate M2 polarization are not understood. Following IL-4 exposure, suppressor of cytokine signaling (SOCS)1 is highly induced in human monocytes. We found that siRNA knockdown of SOCS1 prolonged IRS-2 tyrosine phosphorylation and enhanced M2 differentiation, although siRNA knockdown of SOCS3 did not affect either. By co-immunoprecipitation, we found that SOCS1 complexes with IRS-2 at baseline, and this association increased after IL-4 stimulation. Because SOCS1 is an E3 ubiquitin ligase, we examined the effect of proteasome inhibitors on IL-4-induced IRS-2 phosphorylation. Proteasomal inhibition prolonged IRS-2 tyrosine phosphorylation, increased ubiquitination of IRS-2, and enhanced M2 gene expression. siRNA knockdown of SOCS1 inhibited ubiquitin accumulation on IRS-2, although siRNA knockdown of SOCS3 had no effect on ubiquitination of IRS-2. Monocytes from healthy and allergic individuals revealed that SOCS1 is induced by IL-4 in healthy monocytes but not allergic cells, whereas SOCS3 is highly induced in allergic monocytes. Healthy monocytes displayed greater ubiquitination of IRS-2 and lower M2 polarization than allergic monocytes in response to IL-4 stimulation. Here, we identify SOCS1 as a key negative regulator of IL-4-induced IRS-2 signaling and M2 differentiation. Our findings provide novel insight into how dysregulated expression of SOCS increases IL-4 responses in allergic monocytes, and this may represent a new therapeutic avenue for managing allergic disease.