Aberrant cell proliferation and differentiation after toxic injury to airway epithelium can lead to the development of various lung diseases including cancer. The activator protein-1 (AP-1) transcription factor, composed of mainly Jun-Jun and Jun-Fos protein dimers, acts as an environmental biosensor to various external toxic stimuli and regulates gene expression involved in various biological processes. Gene disruption studies indicate that the AP-1 family members c-jun, junB, and fra1 are essential for embryonic development, whereas junD, c-fos, and fosB are required for normal postnatal growth. However, broad or target-specific transgenic overexpression of the some of these proteins gives very distinct phenotype(s), including tumor formation. This implies that, although they are required for normal cellular processes, their abnormal activation after toxic injury can lead to the pathogenesis of the lung disease. Consistent with this view, various environmental toxicants and carcinogens differentially regulate Jun and Fos expression in cells of the lung both in vivo and in vitro. Moreover, Jun and Fos proteins distinctly bind to the promoter regions of a wide variety of genes to differentially regulate their expression in epithelial injury, repair, and differentiation. Importantly, lung tumors induced by various carcinogens display a sustained expression of certain AP-1 family members. Therefore a better understanding of the mechanisms of regulation and functional role(s), as well as identification of target genes of members of the AP-1 family in airway epithelial cells, will provide additional insight into toxicant-induced lung diseases. These studies might offer a unique opportunity to use AP-1 family members and transactivation as potential diagnostic markers or drug targets for early detection and/or prevention of various lung diseases.