The tripeptide glycine-proline-glutamate analogue NNZ-2566 (Neuren Pharmaceuticals) demonstrates neuroprotective efficacy in models of traumatic brain injury. In penetrating ballistic-like brain injury (PBBI), it significantly decreases injury-induced upregulation of inflammatory cytokines including TNF-α, IFN-γ, and IL-6. However, the mechanism by which NNZ-2566 acts has yet to be determined. The activating transcription factor-3 (ATF3) is known to repress expression of these inflammatory cytokines and was increased at the mRNA and protein level 24-h post-PBBI. This study investigated whether 12 h of NNZ-2566 treatment following PBBI alters atf3 expression. PBBI alone significantly increased atf3 mRNA levels by 13-fold at 12 h and these levels were increased by an additional fourfold with NNZ-2566 treatment. To confirm that changes in mRNA translated to changes in protein expression, ATF3 expression levels were determined in vivo in microglia/macrophages, T cells, natural killer cells (NKCs), astrocytes, and neurons. PBBI alone significantly increased ATF3 in microglia/macrophages (820%), NKCs (58%), and astrocytes (51%), but decreased levels in T cells (48%). NNZ-2566 treatment further increased ATF3 protein expression in microglia/macrophages (102%), NKCs (308%), and astrocytes (13%), while reversing ATF3 decreases in T cells. Finally, PBBI increased ATF3 levels by 55% in neurons and NNZ-2566 treatment further increased these levels an additional 33%. Since increased ATF3 may be an innate protective mechanism to limit inflammation following injury, these results demonstrating that the anti-inflammatory and neuroprotective drug NNZ-2566 increase both mRNA and protein levels of ATF3 in multiple cell types provide a cellular mechanism for NNZ-2566 modulation of neuroinflammation following PBBI.