Gene expression arrays show that human epithelial cells and human arthritis-affected cartilage lack detectable amounts of mRNA for IL-1 antagonizing molecules: IL-1Ra and IL-1RII, but constitutively express IL-1. Functional genomic analysis was performed by reconstituting human IL-1RII expression in various IL-1RII-deficient cell types to examine its antagonist role using gene therapy approaches. Adenovirus-expressing IL-1RII when transduced into human and bovine chondrocytes, human and rabbit synovial cells, human epithelial cells, and rodent fibroblasts expressed membrane IL-1RII and spontaneously released functional soluble IL-1RII. The IL-1RII(+) (but not IL-1RII(-)) cells were resistant to IL-1beta-induced, NO, PGE(2), IL-6, and IL-8 production or decreased proteoglycan synthesis. IL-1RII inhibited the function of IL-1 in chondrocytes and IL-1- and TNF-alpha-induced inflammatory mediators in human synovial and epithelial cells. IL-1RII(+) chondrocytes were more resistant to induction of NO and PGE(2) by IL-1beta compared with IL-1RII(-) cells incubated with a 10-fold (weight) excess of soluble type II IL-1R (sIL-1RII) protein. In cocultures, IL-1RII(+) synovial cells released sIL-1RII, which in a paracrine fashion protected chondrocytes from the effects of IL-1beta. Furthermore, IL-1RII(+) (but not IL-1RII(-)) chondrocytes when transplanted onto human osteoarthritis-affected cartilage in vitro, which showed spontaneous release of sIL-1RII for 20 days, inhibited the spontaneous production of NO and PGE(2) in cartilage in ex vivo. In summary, reconstitution of IL-1RII in IL-1RII(-) cells using gene therapy approaches significantly protects cells against the autocrine and paracrine effects of IL-1 at the signaling and transcriptional levels.