Circular RNAs (circRNAs) constitute a large class of RNA species formed by the back-splicing of co-linear exons, often within protein-coding transcripts. Despite much progress in the field, it remains elusive whether the majority of circRNAs are merely aberrant splicing by-products with unknown functions, or their production is spatially and temporally regulated to carry out specific biological functions. To date, the majority of circRNAs have been cataloged in resting cells. Here, we identify an LPS-inducible circRNA: mcircRasGEF1B, which is predominantly localized in cytoplasm, shows cell-type specific expression, and has a human homolog with similar properties, hcircRasGEF1B. We show that knockdown of the expression of mcircRasGEF1B reduces LPS-induced ICAM-1 expression. Additionally, we demonstrate that mcircRasGEF1B regulates the stability of mature ICAM-1 mRNAs. These findings expand the inventory of functionally characterized circRNAs with a novel RNA species that may play a critical role in fine-tuning immune responses and protecting cells against microbial infection.