Glucocorticoid action within individual cells is potently modulated by 11beta-hydroxysteroid dehydrogenase (11beta-HSD), which, by interconverting active and inert glucocorticoids, determines steroid access to receptors. Type 1 11beta-HSD (11beta-HSD1) is highly expressed in liver where it regenerates glucocorticoids, thus amplifying their action and contributing to induction of glucocorticoid-responsive genes, most of which are also regulated by members of the C/EBP (CAAT/enhancer-binding protein) family of transcription factors. Here we demonstrate that C/EBPalpha is a potent activator of the 11beta-HSD1 gene in hepatoma cells and that mice deficient in C/EBPalpha have reduced hepatic 11beta-HSD1 expression. In contrast, C/EBPbeta is a relatively weak activator of 11beta-HSD1 transcription in hepatoma cells and attenuates C/EBPalpha induction, and mice that lack C/EBPbeta have increased hepatic 11beta-HSD1 mRNA. The 11beta-HSD1 promoter (between -812 and +76) contains 10 C/EBP binding sites, and mutation of the promoter proximal sites decreases the C/EBP inducibility of the promoter. One site encompasses the transcription start, and both C/EBPalpha and C/EBPbeta are present in complexes formed by liver nuclear proteins at this site. The regulation of 11beta-HSD1 expression, and hence intracellular glucocorticoid levels, by members of the C/EBP family provides a novel mechanism for cross-talk between the C/EBP family of transcription factors and the glucocorticoid signaling pathway.