The respiratory tract is heavily populated with innate immune cells, but the mechanisms that control such cells are poorly defined. Here we found that the E3 ubiquitin ligase TRIM29 was a selective regulator of the activation of alveolar macrophages, the expression of type I interferons and the production of proinflammatory cytokines in the lungs. We found that deletion of TRIM29 enhanced macrophage production of type I interferons and protected mice from infection with influenza virus, while challenge of Trim29^−/− mice with Haemophilus influenzae resulted in lethal lung inflammation due to massive production of proinflammatory cytokines by macrophages. Mechanistically, we demonstrated that TRIM29 inhibited interferon-regulatory factors and signaling via the transcription factor NF-κB by degrading the adaptor NEMO and that TRIM29 directly bound NEMO and subsequently induced its ubiquitination and proteolytic degradation. These data identify TRIM29 as a key negative regulator of alveolar macrophages and might have important clinical implications for local immunity and immunopathology.