TNF receptor-associated factor 6 (TRAF6) plays a critical role in NF-κB and mitogen-activated protein kinase (MAPK) signaling pathways, both of which mediate macrophage activation in response to pathogen-associated molecular patterns such as bacterial endotoxin, lipopolysaccharides (LPS). In this study, we investigated whether HLA-B associated transcript-3 (BAT3) regulates LPS-induced macrophage activation. BAT3 physically interacted with TRAF6 in macrophages, and this interaction was enhanced in the cells after LPS treatment. Furthermore, BAT3 inhibited the homo-oligomerization of TRAF6 as well as the interaction between TRAF6 and its downstream kinase transforming growth factor beta-activated kinase 1 (TAK1), thereby suppressing TRAF6-mediated signaling events. Intriguingly, TRAF6 mediated ubiquitination of BAT3 and this ubiquitination was crucial for its inhibitory effect on TRAF6-mediated signaling. Depletion of BAT3 by RNA interference resulted in enhancement of LPS-induced activation of the NF-κB signaling with increasing expression levels of pro-inflammatory cytokines. These findings suggest that BAT3 functions as the negative regulator of LPS-induced macrophage activation.