Matrix metalloproteinase (MMP)-13 has a pivotal, rate-limiting function in cartilage remodeling and degradation due to its specificity for cleaving type II collagen. The proximal MMP13 promoter contains evolutionarily conserved E26 transformation-specific sequence binding sites that are closely flanked by AP-1 and Runx2 binding motifs, and interplay among these and other factors has been implicated in regulation by stress and inflammatory signals. Here we report that ELF3 directly controls MMP13 promoter activity by targeting an E26 transformation-specific sequence binding site at position -78 bp and by cooperating with AP-1. In addition, ELF3 binding to the proximal MMP13 promoter is enhanced by IL-1β stimulation in chondrocytes, and the IL-1β-induced MMP13 expression is inhibited in primary human chondrocytes by siRNA-ELF3 knockdown and in chondrocytes from Elf3(-/-) mice. Further, we found that MEK/ERK signaling enhances ELF3-driven MMP13 transactivation and is required for IL-1β-induced ELF3 binding to the MMP13 promoter, as assessed by chromatin immunoprecipitation. Finally, we show that enhanced levels of ELF3 co-localize with MMP13 protein and activity in human osteoarthritic cartilage. These studies define a novel role for ELF3 as a procatabolic factor that may contribute to cartilage remodeling and degradation by regulating MMP13 gene transcription.