11beta-Hydroxysteroid dehydrogenase type 1 (11beta-HSD1) converts inert 11keto-glucocorticoids to active 11beta-hydroxy forms, thereby amplifying intracellular glucocorticoid action. Up-regulation of 11beta-HSD1 in adipose tissue and liver is of pathogenic importance in metabolic syndrome. However, the mechanisms controlling 11beta-HSD1 transcription are poorly understood. Glucocorticoids themselves potently increase 11beta-HSD1 expression in many cells, providing a potential feed-forward system to pathology. We have investigated the molecular mechanisms by which glucocorticoids regulate transcription of 11beta-HSD1, exploiting an A549 cell model system in which endogenous 11beta-HSD1 is expressed and is induced by dexamethasone. We show that glucocorticoid induction of 11beta-HSD1 is indirect and requires new protein synthesis. A glucocorticoid-responsive region maps to between -196 and -88 with respect to the transcription start site. This region contains two binding sites for CCAAT/enhancer-binding protein (C/EBP) that together are essential for the glucocorticoid response and that bind predominantly C/EBPbeta, with C/EBPdelta present in a minority of the complexes. Both C/EBPbeta and C/EBPdelta are rapidly induced by glucocorticoids in A549 cells, but small interfering RNA-mediated knockdown shows that only C/EBPbeta reduction attenuates the glucocorticoid induction of 11beta-HSD1. Chromatin immunoprecipitation studies demonstrated increased binding of C/EBPbeta to the 11beta-HSD1 promoter in A549 cells after glucocorticoid treatment. A similar mechanism may apply in adipose tissue in vivo where increased C/EBPbeta mRNA levels after glucocorticoid treatment were associated with increased 11beta-HSD1 expression. C/EBPbeta is a key mediator of metabolic and inflammatory signaling. Positive regulation of 11beta-HSD1 by C/EBPbeta may link amplification of glucocorticoid action with metabolic and inflammatory pathways and may represent an endogenous innate host-defense mechanism.