Effective treatment of systemic lupus erythematosus (SLE) remains an unmet need. Different subsets of macrophages play differential roles in SLE and the modulation of macrophage polarization away from M1 status is beneficial for SLE therapeutics. Given the pathogenic roles of type I interferons (IFN-I) in SLE, this study investigated the effects and mechanisms of a mitochondria localization molecule ubiquitin specific peptidase 18 (USP18) preserving anti-IFN effects and isopeptidase activity on macrophage polarization. After observing USP18 induction in monocytes from SLE patients, we studied mouse bone marrow-derived macrophages and showed that USP18 deficiency increased M1signal (LPS + IFN-γ treatment)-induced macrophage polarization, and the effects involved the induction of glycolysis and mitochondrial respiration and the expression of several glycolysis-associated enzymes and molecules, such as hypoxia-inducible factor-1α. Moreover, the effects on mitochondrial activities, such as mitochondrial DNA release and mitochondrial reactive oxygen species production were observed. In contrast, the overexpression of USP18 inhibited M1signal-mediated and enhanced interleukin-4 (IL-4)-mediated polarization of macrophages and the related cellular events. Moreover, the levels of USP18 mRNA expression showed tendency of correlation with the expression of metabolic enzymes in monocytes from patients with SLE. We thus concluded that by preserving anti-IFN effect and downregulating M1 signaling, promoting USP18 activity may serve as a useful approach for SLE therapeutics.