DNAX-activating protein of 12 kD (DAP12) is an immunoreceptor tyrosine-based activation motif (ITAM)–containing adaptor protein found in myeloid cells and natural killer cells, and it couples to various receptors that mediate either cellular activation or inhibition. DAP12 inhibits Toll-like receptor (TLR) signaling, such as that of TLR4 in response to its ligand lipopolysaccharide (LPS), as well as cytokine responses by coupling to TREM2 (triggering receptor expressed on myeloid cells 2) at the plasma membrane. Understanding the mechanisms that inhibit inflammatory responses in macrophages is important for the development of therapies to treat inflammatory diseases. We show that inhibition of LPS responses by DAP12 is mediated by the adaptor protein DOK3 (downstream of kinase 3). DOK3 physically associated with the ITAM of DAP12 through its phosphotyrosine-binding domain. In response to LPS, DOK3 was phosphorylated in a DAP12- and Src-dependent manner, which led to translocation of phosphorylated DOK3 to the plasma membrane. DOK3-deficient cells exhibited increased production of proinflammatory cytokines and activation of extracellular signal–regulated kinase (ERK). Compared to wild-type mice, DOK3-deficient mice had increased susceptibility to challenge with a sublethal dose of LPS and produced increased serum concentrations of the inflammatory cytokine tumor necrosis factor–α (TNF-α). Together, these data suggest the mechanism by which DAP12 and TREM2 inhibit LPS signaling in macrophages to prevent inflammation.