Strong evidence exists for a link between chronic low level inflammation and dietary-induced insulin resistance; however, little is known about the transcriptional networks involved. Here we show that high fat diet (HFD) or saturated fatty acid exposure directly activates CCAAT/enhancer-binding protein β (C/EBPβ) protein expression in liver, adipocytes, and macrophages. Global C/EBPβ deletion prevented HFD-induced inflammation and surprisingly increased mitochondrial gene expression in white adipose tissue along with brown adipose tissue markers PRDM16, CIDEa, and UCP1, consistent with a resistance to HFD-induced obesity. In isolated peritoneal macrophages from C/EBPβ-/- mice, the anti-inflammatory gene LXRα and its targets SCD1 and DGAT2 were strikingly up-regulated along with IL-10, while NLRP3, a gene important for activating the inflammasome, was suppressed in response to palmitate. Using RAW 264.7 macrophage cells or 3T3-L1 adipocytes, C/EBPβ knockdown prevented palmitate-induced inflammation and p65-NFκB DNA binding activity, while C/EBPβ overexpression induced NFκB binding, JNK activation, and pro-inflammatory cytokine gene expression directly. Finally, chimeric bone marrow mice transplanted with bone marrow lacking C/EBPβ-/- demonstrated reduced systemic and adipose tissue inflammatory markers, macrophage content, and maintained insulin sensitivity on HFD. Taken together, these results demonstrate that HFD or palmitate exposure triggers C/EBPβ expression that controls expression of distinct aspects of alternative macrophage activation. Reducing C/EBPβ in macrophages confers protection from HFD-induced systemic inflammation and insulin resistance, suggesting it may be an attractive therapeutic target for ameliorating obesity-induced inflammatory responses.