Airway inflammation is the hallmark of many respiratory disorders, such as asthma and cystic fibrosis. Changes in airway gene expression triggered by inflammation play a key role in the pathogenesis of these diseases. Genetic linkage studies suggest that ESE-2 and ESE-3, which encode epithelium-specific Ets-domain-containing transcription factors, are candidate asthma susceptibility genes. We report here that the expression of another member of the Ets family transcription factors ESE-1, as well as ESE-3, is upregulated by the inflammatory cytokines interleukin-1beta (IL-1beta) and tumor necrosis factor-alpha (TNF-alpha) in bronchial epithelial cell lines. Treatment of these cells with IL-1beta and TNF-alpha resulted in a dramatic increase in mRNA expression for both ESE-1 and ESE-3. We demonstrate that the induced expression is mediated by activation of the transcription factor NF-kappaB. We have characterized the ESE-1 and ESE-3 promoters and have identified the NF-kappaB binding sequences that are required for the cytokine-induced expression. In addition, we also demonstrate that ESE-1 upregulates ESE-3 expression and downregulates its own induction by cytokines. Finally, we have shown that in Elf3 (homologous to human ESE-1) knockout mice, the expression of the inflammatory cytokine interleukin-6 (IL-6) is downregulated. Our findings suggest that ESE-1 and ESE-3 play an important role in airway inflammation.