The invention provides methods and compositions for modulating the activity of XBP-I protein, or a protein in a signal transduction pathway involving XBP-I to modulate the TLR-mediated activation of cells of the innate immune system. Enhancing the TLR-mediated activation of cells of the innate immune system enhance inflammatory responses. The present invention also pertains to methods for identifying compounds that modulate Toll-like receptor-mediated signaling.