Abstract Background Nox-2 (also known as gp91phox), a subunit component of NADPH oxidases, generates reactive oxygen species (ROS). Nox-dependent ROS generation and nitric oxide (NO) release by microglia have been implicated in a variety of diseases in the central nervous system. Dexamethasone (Dex) has been shown to suppress the ROS production, NO release and inflammatory reaction of activated microglial cells. However, the underlying mechanisms remain unclear. Results The present study showed that the increased ROS production and NO release in activated BV-2 microglial cells by LPS were associated with increased expression of Nox-2 and iNOS. Dex suppressed the upregulation of Nox-2 and iNOS, as well as the subsequent ROS production and NO synthesis in activated BV-2 cells. This inhibition caused by Dex appeared to be mediated by upregulation of MAPK phosphatase-1 (MKP-1), which antagonizes the activity of mitogen-activated protein kinases (MAPKs). Dex induced-suppression of Nox-2 and -upregulation of MKP-1 was also evident in the activated microglia from corpus callosum of postnatal rat brains. The overexpression of MKP-1 or inhibition of MAPKs (by specific inhibitors of JNK and p38 MAPKs), were found to downregulate the expression of Nox-2 and iNOS and thereby inhibit the synthesis of ROS and NO in activated BV-2 cells. Moreover, Dex was unable to suppress the LPS-induced synthesis of ROS and NO in BV-2 cells transfected with MKP-1 siRNA. On the other hand, knockdown of Nox-2 in BV-2 cells suppressed the LPS-induced ROS production and NO release. Conclusion In conclusion, it is suggested that downregulation of Nox-2 and overexpression of MKP-1 that regulate ROS and NO may form the potential therapeutic strategy for the treatment of neuroinflammation in neurodegenerative diseases.