Loss of IL-10 signaling in macrophages (Mφs) leads to inflammatory bowel disease (IBD). Induced pluripotent stem cells (iPSCs) were generated from an infantile-onset IBD patient lacking a functional IL10RB gene. Mφs differentiated from IL-10RB−/− iPSCs lacked IL-10RB mRNA expression, were unable to phosphorylate STAT3, and failed to reduce LPS induced inflammatory cytokines in the presence of exogenous IL-10. IL-10RB−/− Mφs exhibited a striking defect in their ability to kill Salmonella enterica serovar Typhimurium, which was rescuable after experimentally introducing functional copies of the IL10RB gene. Genes involved in synthesis and receptor pathways for eicosanoid prostaglandin E2 (PGE2) were more highly induced in IL-10RB−/− Mφs, and these Mφs produced higher amounts of PGE2 after LPS stimulation compared with controls. Furthermore, pharmacological inhibition of PGE2 synthesis and PGE2 receptor blockade enhanced bacterial killing in Mφs. These results identify a regulatory interaction between IL-10 and PGE2, dysregulation of which may drive aberrant Mφ activation and impaired host defense contributing to IBD pathogenesis.