The triggering receptor expressed on myeloid cells 2 (TREM-2) delivers intracellular signals through the adaptor DAP12 to regulate myeloid cell function both within and outside the immune system. The role of TREM-2 in immunity has been obscured by the failure to detect expression of the TREM-2 protein in vivo. In this study, we show that TREM-2 is expressed on macrophages infiltrating the tissues from the circulation and that alternative activation with IL-4 can induce TREM-2. TREM-2 expression is abrogated by macrophage maturation with LPS of IFN-gamma. Using TREM-2(-/-) mice, we find that TREM-2 functions to inhibit cytokine production by macrophages in response to the TLR ligands LPS, zymosan, and CpG. Furthermore, we find that TREM-2 completely accounts for the increased cytokine production previously reported by DAP12(-/-) macrophages. Taken together, these data show that TREM-2 is expressed on newly differentiated and alternatively activated macrophages and functions to restrain macrophage activation.