Efficient expression of innate immunity is critically dependent upon the capacity of the neutrophil to be activated rapidly in the face of an acute threat and to involute once that threat has been eliminated. Here we report a novel mechanism regulating neutrophil survival dynamically through the tyrosine phosphorylation or dephosphorylation of caspase-8. Caspase-8 is tyrosine-phosphorylated in freshly isolated neutrophils but spontaneously dephosphorylates in culture, in association with the progression of constitutive apoptosis. Phosphorylation of caspase-8 on Tyr-310 facilitates its interaction with the Src-homology domain 2 containing tyrosine phosphatase-1 (SHP-1) and enables SHP-1 to dephosphorylate caspase-8, permitting apoptosis to proceed. The non-receptor tyrosine kinase, Lyn, can phosphorylate caspase-8 on Tyr-397 and Tyr-465, rendering it resistant to activational cleavage and inhibiting apoptosis. Exposure to lipopolysaccharide reduces SHP-1 activity and binding to caspase-8, caspase-8 activity, and rates of spontaneous apoptosis. SHP-1 activity is reduced and Lyn increased in neutrophils from patients with sepsis, in association with profoundly delayed apoptosis; inhibition of Lyn can partially reverse this delay. Thus the phosphorylation and dephosphorylation of caspase-8, mediated by Lyn and SHP-1, respectively, represents a novel, dynamic post-translational mechanism for the regulation of neutrophil apoptosis whose dysregulation contributes to persistent neutrophil survival in sepsis.