Cyclooxygenase-2 (COX-2) is a key enzyme in the production of prostaglandins that are major inflammatory agents. COX-2 production is triggered by exposure to various cytokines and to bacterial endotoxins. We present here a novel role for the Ets transcription factor ESE-1 in regulating the COX-2 gene in response to endotoxin and other pro-inflammatory stimuli. We report that the induction of COX-2 expression by lipopolysaccharide (LPS) and pro-inflammatory cytokines correlates with ESE-1 induction in monocyte/macrophages. ESE-1, in turn, binds to several E26 transformation specific (Ets) sites on the COX-2 promoter. In vitro analysis demonstrates that ESE-1 binds to and activates the COX-2 promoter to levels comparable to LPS-mediated induction. Moreover, we provide results showing that the induction of COX-2 by LPS may require ESE-1, as the mutation of the Ets sites in the COX-2 promoter or overexpression of a dominant-negative form of ESE-1 inhibits LPS-mediated COX-2 induction. The effect of ESE-1 on the COX-2 promoter is further enhanced by cooperation with other transcription factors such as nuclear factor-kappa B and nuclear factor of activated T cells. Neutralization of COX-2 is the goal of many anti-inflammatory drugs. As an activator of COX-2 induction, ESE-1 may become a target for such therapeutics as well. Together with our previous reports of the role of ESE-1 as an inducer of nitric oxide synthase in endothelial cells and as a mediator of pro-inflammatory cytokines in vascular and connective tissue cells, these results establish ESE-1 as an important player in the regulation of inflammation.