Melioidosis, caused by Burkholderia pseudomallei, is endemic in northeastern Thailand and Northern Australia. Severe septicemic melioidosis is associated with high levels of pro-inflammatory cytokines and is correlated with poor clinical outcomes. IL-10 is an immunoregulatory cytokine, which in other infections can control the expression of pro-inflammatory cytokines, but its role in melioidosis has not been addressed. Here, whole blood of healthy seropositive individuals (n = 75), living in N. E. Thailand was co-cultured with B. pseudomallei and production of IL-10 and IFN-γ detected and the cellular sources identified. CD3- CD14+ monocytes were the main source of IL-10. Neutralization of IL-10 increased IFN-γ, IL-6 and TNF-α production and improved bacteria killing. IFN-γ production and microbicidal activity were impaired in individuals with diabetes mellitus (DM). In contrast, IL-10 production was unimpaired in individuals with DM, resulting in an IL-10 dominant cytokine balance. Neutralization of IL-10 restored the IFN-γ response of individuals with DM to similar levels observed in healthy individuals and improved killing of B. pseudomallei in vitro. These results demonstrate that monocyte derived IL-10 acts to inhibit potentially protective cell mediated immune responses against B. pseudomallei, but may also moderate the pathological effects of excessive cytokine production during sepsis.