Fibrotic scarring secondary to the foreign body reaction (FBR) generates a physical barrier obstructing the functional interaction of implantable medical devices with the host tissue. The mechanistic basis of the FBR is poorly understood, restricting the current therapeutic options to prevent it. Here, we show that in a peripheral nerve injury-implant model (NI) the FBR has a dysregulated innate immune profile recruiting MI-like activated macrophages, immature macrophages, activated dendritic cells, and immature dendritic cells compared with nerve injury alone, which recruits predominantly M2-like macrophages. The gene signature of the FBR shows increased myofibroblast activity, explaining why collagen and scarring are present, but also up-regulation of inflammasome constituents. Local delivery of the nucleotide-binding oligomerization domain-like receptor family pyrin domain containing 3 (NLRP3) inflammasome inhibitor MCC950, through its incorporation into the silicone coating of implants, reduced the inflammation and fibrosis associated with both NI and subcutaneous implantable devices. In the NI model, MCC950 did not affect neuronal repair. Inhibition of the NLRP3 inflammasome may, therefore, be a promising therapeutic approach to prevent the FBR, hence prolonging the functional lifespan of implantable medical devices and neural implants.