Interleukin-1 receptor-associated kinase 3 (IRAK3) modulates the magnitude of cellular responses to ligands perceived by interleukin-1 receptors (IL-1Rs) and Toll-like receptors (TLRs), leading to decreases in pro-inflammatory cytokines and suppressed inflammation. The molecular mechanism of IRAK3’s action remains unknown. IRAK3 functions as a guanylate cyclase, and its cGMP product suppresses lipopolysaccharide (LPS)-induced nuclear factor kappa-light-chain-enhancer of activated B cell (NFκB) activity. To understand the implications of this phenomenon, we expanded the structure–function analyses of IRAK3 through site-directed mutagenesis of amino acids known or predicted to impact different activities of IRAK3. We verified the capacity of the mutated IRAK3 variants to generate cGMP in vitro and revealed residues in and in the vicinity of its GC catalytic center that impact the LPS-induced NFκB activity in immortalized cell lines in the absence or presence of an exogenous membrane-permeable cGMP analog. Mutant IRAK3 variants with reduced cGMP generating capacity and differential regulation of NFκB activity influence subcellular localization of IRAK3 in HEK293T cells and fail to rescue IRAK3 function inIRAK3knock-out THP-1 monocytes stimulated with LPS unless the cGMP analog is present. Together, our results shed new light on the mechanism by which IRAK3 and its enzymatic product control the downstream signaling, affecting inflammatory responses in immortalized cell lines.