Elevated levels of Oncostatin M (OSM), an interleukin-6 family cytokine, have been observed in multiple sclerosis (MS), HIV-associated neurocognitive disorder (HAND), and glioblastoma (GBM); however, its effects within the CNS are not well understood. OSM regulates gene expression primarily by activating the JAK/STAT, NF-kappaB, and/or MAPK pathways, in a cell-type specific manner. In our studies, OSM induces the production of the proinflammatory cytokine tumor necrosis factor-alpha (TNF-alpha) and inducible nitric oxide synthase (iNOS) from microglia in an NF-kappaB-dependent manner. This expression also partially requires the intermediate production of TNF-alpha and subsequent NF-kappaB activation via TNF-R1. We also demonstrate that OSM-induced TNF-alpha production from microglia is neurotoxic. The IL-12 family member, IL-27, suppresses OSM-mediated TNF-alpha and iNOS expression at the transcriptional level by inhibiting activation of the NF-kappaB pathway, and rescues the neurotoxicity induced by OSM-stimulated microglia. These studies are the first to demonstrate the proinflammatory effects of OSM in microglia, and also identify IL-27 as a novel inhibitor of inflammatory processes in these cells.