Lung fibrosis is a fatal condition of excess extracellular matrix (ECM) deposition associated with increased transforming growth factor beta (TGF-beta) activity. Although much is known about its pathological features, our understanding of the signal transduction pathways resulting in increased ECM and collagen deposition in response to TGF-beta is still incompletely defined. We have previously reported that a JunD homodimer of the transcription factor AP-1 is specifically activated by TGF-beta in lung fibroblasts. Here we demonstrate that JunD is also specifically required for TGF-beta-induced effects. Antisense against JunD, but not c-fos or c-jun, significantly inhibited collagen deposition in response to TGF-beta in primary human lung fibroblasts. We then investigated the ability of pharmacological agents to inhibit TGF-beta-induced signaling and collagen deposition. Cs-A and IFN-gamma, but not glucocorticoids, cyclophosphamide, or azathioprine, inhibited TGF-beta-induced signaling, as assessed by luciferase reporter gene assays, and collagen deposition. TGF-beta antagonism by Cs-A was associated with direct inhibition of JunD activation, as demonstrated by electrophoretic mobility shift analyses. In contrast, the effects of IFN-gamma required signal transducer and activator of transcription (STAT)-1. We thus identify the JunD isoform of AP-1 as an essential mediator of TGF-beta-induced effects in lung fibroblasts. TGF-beta-induced signaling and collagen deposition are efficiently antagonized by Cs-A and IFN-gamma treatment, both of which exhibit distinct molecular mechanisms of action. These observations therefore offer novel targets for future therapy of fibrotic lung disease.