Repulsive guidance molecule (RGM) family members RGMa, RGMb/Dragon, and RGMc/hemojuvelin were found recently to act as bone morphogenetic protein (BMP) coreceptors that enhance BMP signaling activity. Although our previous studies have shown that hemojuvelin regulates hepcidin expression and iron metabolism through the BMP pathway, the role of the BMP signaling mediated by Dragon remains largely unknown. We have shown previously that Dragon is expressed in neural cells, germ cells, and renal epithelial cells. In this study, we demonstrate that Dragon is highly expressed in macrophages. Studies with RAW264.7 and J774 macrophage cell lines reveal that Dragon negatively regulates IL-6 expression in a BMP ligand-dependent manner via the p38 MAPK and Erk1/2 pathways but not the Smad1/5/8 pathway. We also generated Dragon knockout mice and found that IL-6 is upregulated in macrophages and dendritic cells derived from whole lung tissue of these mice compared with that in respective cells derived from wild-type littermates. These results indicate that Dragon is an important negative regulator of IL-6 expression in immune cells and that Dragon-deficient mice may be a useful model for studying immune and inflammatory disorders.