Toll-like receptor (TLR) signaling regulates macrophage activation and effector cytokine propagation in the constrained environment of a tissue. In macrophage populations, TLR4 stimulates the dose-dependent transcription of nuclear factor kappaB (NF-kappaB) target genes. However, using single-RNA counting, we found that individual cells exhibited a wide range (three orders of magnitude) of expression of the gene encoding the proinflammatory cytokine tumor necrosis factor-alpha (TNF-alpha). The TLR4-induced TNFA transcriptional response correlated with the extent of NF-kappaB signaling in the cells and their size. We compared the rates of TNF-alpha production and uptake in macrophages and mouse embryonic fibroblasts and generated a mathematical model to explore the heterogeneity in the response of macrophages to TLR4 stimulation and the propagation of the TNF-alpha signal in the tissue. The model predicts that the local propagation of the TLR4-dependent TNF-alpha response and cellular NF-kappaB signaling are limited to small distances of a few cell diameters between neighboring tissue-resident macrophages. In our predictive model, TNF-alpha propagation was constrained by competitive uptake of TNF-alpha from the environment, rather than by heterogeneous production of the cytokine. We propose that the highly constrained architecture of tissues enables effective localized propagation of inflammatory cues while avoiding out-of-context responses at longer distances.