Family studies of asthma suggest that the genes ESE-2 and ESE-3 contain polymorphisms that contribute to disease susceptibility. Each gene codes for an ETS transcription factor that is characterized by epithelium-restricted constitutive expression and may function as a context-dependent activator or repressor of transcription; however, nothing is known about the role of these genes in lung homeostasis or the pathogenesis of airway disease. In this study, we show that ESE-3 mRNA and protein are constitutively expressed in bronchial and mucous gland epithelial cells. Consistent with these findings, ESE-3 mRNA is constitutively expressed in human bronchial epithelial cells grown in tissue culture. In contrast, ESE-2 mRNA could not be detected in the lung or cultured human bronchial epithelial cells. Human bronchial smooth muscle cells and fibroblasts do not constitutively express ESE-3; however, after stimulation with interleukin-1beta or tumor necrosis factor-alpha, levels of ESE-3 mRNA and protein increase dramatically by 24 h. This cytokine induction is dose-dependent and abrogated by specific inhibitors of the MEK1/2 (U0126) and p38 (SB03580) signal transduction pathways. Overexpression of ESE-3 protein in 3T3 cells and human bronchial smooth muscle cells inhibits MMP-1 promoter activity, suggesting that ESE-3 may function as a transcriptional repressor.