The FANTOM5 consortium utilised cap analysis of gene expression (CAGE) to provide an unprecedented insight into transcriptional regulation in human cells and tissues. In the current study, we have used CAGE-based transcriptional profiling on an extended dense time course of the response of human monocyte-derived macrophages grown in macrophage colony-stimulating factor (CSF1) to bacterial lipopolysaccharide (LPS). We propose that this system provides a model for the differentiation and adaptation of monocytes entering the intestinal lamina propria. The response to LPS is shown to be a cascade of successive waves of transient gene expression extending over at least 48 hours, with hundreds of positive and negative regulatory loops. Promoter analysis using motif activity response analysis (MARA) identified some of the transcription factors likely to be responsible for the temporal profile of transcriptional activation. Each LPS-inducible locus was associated with multiple inducible enhancers, and in each case, transient eRNA transcription at multiple sites detected by CAGE preceded the appearance of promoter-associated transcripts. LPS-inducible long non-coding RNAs were commonly associated with clusters of inducible enhancers. We used these data to re-examine the hundreds of loci associated with susceptibility to inflammatory bowel disease (IBD) in genome-wide association studies. Loci associated with IBD were strongly and specifically (relative to rheumatoid arthritis and unrelated traits) enriched for promoters that were regulated in monocyte differentiation or activation. Amongst previously-identified IBD susceptibility loci, the vast majority contained at least one promoter that was regulated in CSF1-dependent monocyte-macrophage transitions and/or in response to LPS. On this basis, we concluded that IBD loci are strongly-enriched for monocyte-specific genes, and identified at least 134 additional candidate genes associated with IBD susceptibility from reanalysis of published GWA studies. We propose that dysregulation of monocyte adaptation to the environment of the gastrointestinal mucosa is the key process leading to inflammatory bowel disease.