Phagocytic clearance of apoptotic leukocytes plays an important role in the resolution of inflammation. The glucocorticoid-inducible protein annexin 1 and annexin 1-derived peptides show potent anti-inflammatory responses in acute and chronic inflammation. In this study, we report that the annexin 1-derived peptide (Ac 2–26) significantly stimulates nonphlogistic phagocytosis of apoptotic polymorphonuclear leukocytes (PMNs) by human monocyte-derived macrophages (Mφ). Peptide Ac 2–26-stimulated phagocytosis is accompanied by rearrangement of the Mφ actin cytoskeleton. To investigate the potential role of endogenous annexin on clearance of apoptotic cells, Mφ were cultured for 5 days in the presence of dexamethasone. Supernatants collected from dexamethasone-treated Mφ significantly enhanced the ability of naive Mφ to engulf apoptotic PMNs. This effect was blocked by an annexin blocking Ab, by immunodepletion of the supernatants, and by the formyl peptide receptor/lipoxin receptor antagonist Boc1. In addition, we show that bone marrow-derived Mφ from annexin 1-null mice present a 40% decreased phagocytosis of apoptotic PMNs compared with cells taken from littermate controls. In conclusion, these results emphasize the pivotal role of annexin 1 as mediator for clearance of apoptotic cells and expand its potential therapeutic role in controlling inflammatory diseases.