Sepsis is a critical inflammatory condition from which numerous patients die due to multiple organ failure and septic shock. The vasoactive hormone adrenomedullin (AM) and its binding protein (AMBP-1) are beneficial in sepsis by abrogating the progression to irreversible shock and decreasing proinflammatory cytokine release. To investigate the anti-inflammatory mechanism, we studied to determine the effect of the AM/AMBP-1 complex on peroxisome proliferator-activated receptor-gamma (PPAR-gamma) expression and activation by using RAW264.7 cells and a rat endotoxemia model. LPS treatment significantly decreased PPAR-gamma expression in vivo and in vitro and was associated with increased TNF-alpha production. Treatment with AM/AMBP-1 for 4 h completely restored PPAR-gamma levels in both models, resulting in TNF-alpha suppression. In a knockdown model using small interfering RNA in RAW264.7 macrophages, AM/AMBP-1 failed to suppress TNF-alpha production in the absence of PPAR-gamma. LPS caused the suppression of intracellular cyclic AMP (cAMP), which was prevented by simultaneous AM/AMBP-1 treatment. Although incubation with dibutyryl cAMP significantly decreased LPS-induced TauNuF-alpha release, it did not alter PPAR-gamma expression. Through inhibition studies using genistein and PD98059 we found that the Pyk-2 tyrosine kinase-ERK1/2 pathway is in part responsible for the AM/AMBP-1-mediated induction of PPAR-gamma and the anti-inflammatory effect. We conclude that AM/AMBP-1 is protective in sepsis due to its vasoactive properties and direct anti-inflammatory effects mediated through both the cAMP-dependent pathway and Pyk-2-ERK1/2-dependent induction of PPAR-gamma.