Serine racemase (SRace) is an enzyme that catalyzes the conversion of L-serine to pyruvate or D-serine, an endogenous agonist for NMDA receptors. Our previous studies showed that inflammatory stimuli such as Abeta could elevate steady-state mRNA levels for SRace, perhaps leading to inappropriate glutamatergic stimulation under conditions of inflammation. We report here that a proinflammatory stimulus (lipopolysaccharide) elevated the activity of the human SRace promoter, as indicated by expression of a luciferase reporter system transfected into a microglial cell line. This effect corresponded to an elevation of SRace protein levels in microglia, as well. By contrast, dexamethasone inhibited the SRace promoter activity and led to an apparent suppression of SRace steady-state mRNA levels. A potential binding site for NFkappaB was explored, but this sequence played no significant role in SRace promoter activation. Instead, large deletions and site-directed mutagenesis indicated that a DNA element between -1382 and -1373 (relative to the start of translation) was responsible for the activation of the promoter by lipopolysaccharide. This region fits the consensus for an activator protein-1 binding site. Lipopolysaccharide induced an activity capable of binding this DNA element in electrophoretic mobility shift assays. Supershifts with antibodies against c-Fos and JunB identified these as the responsible proteins. An inhibitor of Jun N-terminal kinase blocked SRace promoter activation, further implicating activator protein-1. These data indicate that proinflammatory stimuli utilize a signal transduction pathway culminating in activator protein-1 activation to induce expression of serine racemase.