Allergic asthma is characterized by airway eosinophilia, increased mucin production and allergen-specific IgE. Fc gamma receptor IIb (FcgammaRIIb), an inhibitory IgG receptor, has recently emerged as a negative regulator of allergic diseases like anaphylaxis and allergic rhinitis. However, no studies to date have evaluated its role in allergic asthma. Our main objective was to study the role of FcgammaRIIb in allergic lung inflammation. We used a murine model of allergic airway inflammation. Inflammation was quantified by BAL inflammatory cells and airway mucin production. FcgammaRIIb expression was measured by qPCR and flow cytometry and the cytokines were quantified by ELISA. Compared to wild type animals, FcgammaRIIb deficient mice mount a vigorous allergic lung inflammation characterized by increased bronchoalveolar lavage fluid cellularity, eosinophilia and mucin content upon ragweed extract (RWE) challenge. RWE challenge in sensitized mice upregulated FcgammaRIIb in the lungs. Disruption of IFN-gamma gene abrogated this upregulation. Treatment of naïve mice with the Th1-inducing agent CpG DNA increased FcgammaRIIb expression in the lungs. Furthermore, treatment of sensitized mice with CpG DNA prior to RWE challenge induced greater upregulation of FcgammaRIIb than RWE challenge alone. These observations indicated that RWE challenge upregulated FcgammaRIIb in the lungs by IFN-gamma- and Th1-dependent mechanisms. RWE challenge upregulated FcgammaRIIb on pulmonary CD14+/MHC II+ mononuclear cells and CD11c+ cells. FcgammaRIIb deficient mice also exhibited an exaggerated RWE-specific IgE response upon sensitization when compared to wild type mice. We propose that FcgammaRIIb physiologically regulates allergic airway inflammation by two mechanisms: 1) allergen challenge mediates upregulation of FcgammaRIIb on pulmonary CD14+/MHC II+ mononuclear cells and CD11c+ cells by an IFN-gamma dependent mechanism; and 2) by attenuating the allergen specific IgE response during sensitization. Thus, stimulating FcgammaRIIb may be a therapeutic strategy in allergic airway disorders.