Mitogen-activated protein kinase phosphatase-1 (MKP-1), also known as dual specificity phosphatase-1 (DUSP-1), plays a crucial role in the deactivation of MAPKs. Several drugs with immune-suppressive properties modulate MKP-1 expression as part of their mechanism of action. We investigated the effect of mTOR inhibition through rapamycin and a dual mTOR inhibitor (AZD2014) on MKP-1 expression. Low dose rapamycin led to a rapid activation of both AKT and ERK pathways with a subsequent increase in MKP-1 expression. Rapamycin treatment led to phosphorylation of CREB, transcription factor 1 (ATF1), and ATF2, three transcription factors that bind to the cyclic AMP-responsive elements on the Mkp-1 promoter. Inhibition of either the MEK/ERK or the AKT pathway attenuated rapamycin-mediated MKP-1 induction. AZD2014 did not activate AKT but activated the ERK pathway, leading to a moderate MKP-1 induction. Using bone marrow-derived macrophages (BMDMs) derived from wild-type (WT) mice or mice deficient in AKT1 and AKT2 isoforms or BMDM from targeted deficiency in MEK1 and MEK2, we show that rapamycin treatment led to an increased MKP1 expression in BMDM from WT but failed to do so in BMDMs lacking the AKT1 isoform or MEK1 and MEK2. Importantly, rapamycin pretreatment inhibited LPS-mediated p38 activation and decreased nitric oxide and IL-6 production. Our work provides a conceptual framework for the observed immune modulatory effect of mTOR inhibition.