25-Hydroxycholesterol is produced in mammalian tissues. The function of this oxysterol is unknown. Here we describe a central role for 25-hydroxycholesterol in regulating the immune system. In initial experiments, we found that stimulation of macrophage Toll-like receptors (TLR) induced expression of cholesterol 25-hydroxylase and the synthesis of 25-hydroxycholesterol. Treatment of naïve B cells with nanomolar concentrations of 25-hydroxycholesterol suppressed IL-2-mediated stimulation of B cell proliferation, repressed activation-induced cytidine deaminase (AID) expression, and blocked class switch recombination, leading to markedly decreased IgA production. Consistent with these findings, deletion of the mouse cholesterol 25-hydroxylase gene caused an increase in serum IgA. Conversely, inactivation of the CYP7B1 oxysterol 7alpha-hydroxylase, which degrades 25-hydroxycholesterol, decreased serum IgA. The suppression of IgA class switching in B cells by a macrophage-derived sterol in response to TLR activation provides a mechanism for local and systemic negative regulation of the adaptive immune response by the innate immune system.