The tick-transmitted hemoparasite Babesia bovis causes an acute infection that results in persistence and immunity against challenge infection in cattle that control the initial parasitemia. Resolution of acute infection with this protozoal pathogen is believed to be dependent on products of activated macrophages (Mphi), including inflammatory cytokines and nitric oxide (NO) and its derivatives. B. bovis stimulates inducible nitric oxide synthase (iNOS) and production of NO in bovine Mphi, and chemical donors of NO inhibit the growth of B. bovis in vitro. However, the induction of inflammatory cytokines in Mphi by babesial parasites has not been described, and the antiparasitic activity of NO produced by B. bovis-stimulated Mphi has not been definitively demonstrated. We report that monocyte-derived Mphi activated by B. bovis expressed enhanced levels of inflammatory cytokines interleukin-1beta (IL-1beta), IL-12, and tumor necrosis factor alpha that are important for stimulating innate and acquired immunity against protozoal pathogens. Furthermore, a lipid fraction of B. bovis-infected erythrocytes stimulated iNOS expression and NO production by Mphi. Cocultures of Mphi and B. bovis-infected erythrocytes either in contact or physically separated resulted in reduced parasite viability. However, NO produced by bovine Mphi in response to B. bovis-infected erythrocytes was only partially responsible for parasite growth inhibition, suggesting that additional factors contribute to the inhibition of B. bovis replication. These findings demonstrate that B. bovis induces an innate immune response that is capable of controlling parasite replication and that could potentially result in host survival and parasite persistence.