Azithromycin is effective at controlling exaggerated inflammation and slowing the long-term decline of lung function in patients with cystic fibrosis. We previously demonstrated that the drug shifts macrophage polarization toward an alternative, anti-inflammatory phenotype. In this study we investigated the immunomodulatory mechanism of azithromycin through its alteration of signaling via the NF-κB and STAT1 pathways. J774 murine macrophages were plated, polarized (with IFN-γ, IL-4/-13, or with azithromycin plus IFN-γ) and stimulated with LPS. The effect of azithromycin on NF-κB and STAT1 signaling mediators was assessed by Western blot, homogeneous time-resolved fluorescence assay, nuclear translocation assay, and immunofluorescence. The drug’s effect on gene and protein expression of arginase was evaluated as a marker of alternative macrophage activation. Azithromycin blocked NF-κB activation by decreasing p65 nuclear translocation, although blunting the degradation of IκBα was due, at least in part, to a decrease in IKKβ kinase activity. A direct correlation was observed between increasing azithromycin concentrations and increased IKKβ protein expression. Moreover, incubation with the IKKβ inhibitor IKK16 decreased arginase expression and activity in azithromycin-treated cells but not in cells treated with IL-4 and IL-13. Importantly, azithromycin treatment also decreased STAT1 phosphorylation in a concentration-dependent manner, an effect that was reversed with IKK16 treatment. We conclude that azithromycin anti-inflammatory mechanisms involve inhibition of the STAT1 and NF-κB signaling pathways through the drug’s effect on p65 nuclear translocation and IKKβ.