Loss of peroxisome proliferator-activated receptor gamma (PPARγ) function in vascular endothelium enhances atherosclerosis and nuclear factor-kappa-B (NF-κB) target gene expression in high fat diet fed apolipoprotein-E-deficient mice. The mechanisms by which endothelial PPARγ regulates inflammatory responses and protects against atherosclerosis remain unclear. To assess functional interactions between PPARγ and inflammation, we employed a model of interleukin-1β (IL-1β)-induced aortic dysfunction in transgenic mice with endothelial-specific overexpression of either wildtype (E-WT) or dominant negative PPARγ (E-V290M). IL-1β dose-dependently decreased IκBα, increased phospho-p65, and increased luciferase activity in aorta of NF-κB-Luc transgenic mice. IL-1β also dose-dependently reduced endothelial-dependent relaxation by acetylcholine (ACh). The loss of ACh responsiveness was partially improved by pretreating vessels with the PPARγ agonist, rosiglitazone, or by endothelial overexpression of wildtype PPARγ. Conversely, IL-1β-induced endothelial dysfunction was worsened in aorta from E-V290M mice. Although IL-1β increased expression of NF-κB target genes, an NF-κB p65 inhibitor did not alleviate endothelial dysfunction induced by IL-1β. Tempol, a superoxide dismutase mimetic partially restored ACh responsiveness in IL-1β-treated aorta. Notably, Tempol only modestly improved protection in E-WT but had an increased protective effect in E-V290M compared to aorta from non-transgenic mice (NT), suggesting that PPARγ-mediated protection involves antioxidant effects. IL-1β increased ROS and decreased phospho-eNOS (ser1177)/eNOS ratio in NT aorta. These effects were completely abolished in E-WT aorta, but were worsened in E-V290M aorta even in the absence of IL-1β. We conclude that PPARγ protects against IL-1β-mediated endothelial dysfunction through a reduction of oxidative stress responses, but not by blunting IL-1β-mediated NF-κB activity.