Sepsis is a life-threatening condition caused by the body's response to severe and systemic infection and is the leading causes of death in the intensive care units worldwide. Toll-like receptor (TLR) 4 plays a central role in the recognition of both Gram-negative and Gram-positive bacteria and induction of subsequent inflammatory response. However, despite extensive investigation, the regulation of TLR4-mediated inflammatory responses remains fragmentary. Here, we reveal that E3 ubiquitin ligase ZNRF1 modulates caveolin-1 (CAV1) protein stability to regulate TLR4-triggered immune responses. We demonstrate that ZNRF1 physically interacts with CAV1 in response to lipopolysaccharide and mediates ubiquitination and degradation of CAV1. The ZNRF1-CAV1 axis regulates Akt-GSK3b activity upon TLR4 activation, resulting in enhanced production of pro-inflammatory cytokines and inhibition of anti-inflammatory cytokine IL-10. Mice with deletion of ZNRF1 in their hematopoietic cells display increased resistance to endotoxic and polymicrobial septic shock due to attenuated inflammation. Our study identifies ZNRF1 as a new regulator of TLR4-induced inflammatory responses and reveals a novel mechanism for the regulation of TLR4 signaling through CAV1.