Previous work in our laboratory has shown that transglutaminase 2 (TG2) acting as a coreceptor for integrin β3 is required for proper phagocytosis of apoptotic cells. In the absence of TG2, systemic lupus erythematosus-like autoimmunity develops in mice, similarly to other mice characterized by a deficiency in the clearance of apoptotic cells. In this study, we demonstrate that increasing TG2 expression alone in wild-type macrophages is not sufficient to enhance engulfment. However, during engulfment, the lipid content of the apoptotic cells triggers the lipid-sensing receptor liver X receptor (LXR), which in response upregulates the expression of the phagocytic receptor Mer tyrosine kinase and the phagocytosis-related ABCA1, and that of retinaldehyde dehydrogenases leading to the synthesis of a nonclassical retinoid. Based on our retinoid analysis, this compound might be a dihydro-retinoic acid derivative. The novel retinoid then contributes to the upregulation of further phagocytic receptors including TG2 by ligating retinoic acid receptors. Inhibition of retinoid synthesis prevents the enhanced phagocytic uptake induced by LXR ligation. Our data indicate that stimulation of LXR enhances the engulfment of apoptotic cells via regulating directly and indirectly the expression of a range of phagocytosis-related molecules, and its signaling pathway involves the synthesis of a nonclassical retinoid. We propose that retinoids could be used for enhancing the phagocytic capacity of macrophages in diseases such as systemic lupus erythematosus, where impaired phagocytosis of apoptotic cells plays a role in the pathogenesis of the disease.