Model showing how C1q utilizes a natural pathway to dampen inflammation. (A) DNA/RNA-associated HMGB1 is internalized and activates endosomal TLRs, leading to downstream activation of NFκB to induce proinflammatory macrophages. (B) In the presence of C1q without inflammation (basal levels of HMGB1), C1q and LAIR-1 signaling prevents proinflammatory cytokine production. (C) In inflammation with high levels of HMGB1, C1q mediates differentiation of anti-inflammatory macrophages by crosslinking RAGE and LAIR-1 in lipid rafts to facilitate SHP-1 binding to LAIR-1 via phosphorylated ITIMs. Activated SHP-1 may suppress directly or indirectly the pathways downstream of RAGE activation.