Glucocorticoids are widely used in the treatment of allergic and inflammatory diseases. Glucocorticoids have a widespread action on gene expression resulting in their pharmacological actions and also an array of adverse effects which limit their clinical use. It remains, however, to be studied which target gene effects are essential for the anti‐allergic activity of glucocorticoids. Mitogen‐activated protein kinase phosphatase‐1 (MKP‐1) inhibits proinflammatory signalling by suppressing the activity of mitogen activated protein kinase (MAP kinase) pathways. MKP‐1 is one of the anti‐inflammatory genes whose expression is enhanced by glucocorticoids. In the present study, we aimed to investigate the role of MKP‐1 in the therapeutic effects of the glucocorticoid dexamethasone in acute allergic reaction. The effects of dexamethasone were studied in wild‐type and MKP‐1 deficient mice. The mice were first sensitized to ovalbumin, and the allergic reaction was then induced by a subcutaneous ovalbumin injection in the hind paw. Inflammatory edema was quantified with plethysmometer and expression of inflammatory factors was measured by quantitative reverse transcription polymerase chain reaction (RT‐PCR). Dexamethasone reduced the ovalbumin‐induced paw edema at 1.5, 3 and 6 h time points in wild‐type mice by 70%, 95% and 89%, respectively. The effect was largely abolished in MKP‐1 deficient mice. Furthermore, dexamethasone significantly attenuated the expression of ovalbumin‐induced inflammatory factors cyclooxygenase‐2 (COX‐2); inducible nitric oxide synthase (iNOS); interleukins (IL) 1β, 6 and 13; C‐C motif chemokine 11 (CCL‐11); tumour necrosis factor (TNF) and thymic stromal lymphopoietin (TSLP) in wild‐type mice by more than 40%. In contrast, in MKP‐1 deficient mice dexamethasone had no effect or even enhanced the expression of these inflammatory factors. The results suggest that dexamethasone alleviates allergic inflammation through an MKP‐1‐dependent mechanism. The results also demonstrate MKP‐1 as an important conveyor of the favourable glucocorticoid effects in ovalbumin‐induced type I allergic reaction. Together with previous findings, the present study supports the concept of MKP‐1 enhancing compounds as potential novel anti‐inflammatory and anti‐allergic drugs.