Interleukin (IL)-1beta released after lung injury regulates the production of extracellular matrix components. We found that IL-1beta treatment reduced the rate of elastin gene transcription by 74% in neonatal rat lung fibroblasts. Deletion analysis of the rat elastin promoter detected a cis-acting element located at -118 to -102 bp that strongly bound Sp1 and Sp3 but not nuclear factor (NF)-kappaB. This element mediated IL-1beta-induced inhibition of the elastin promoter. IL-1beta treatment did not affect the level of Sp1 but did induce translocation of the p65 subunit of NF-kappaB. Overexpression of p65 decreased elastin promoter activity and markedly reduced elastin mRNA. Immunoprecipitation studies indicated an interaction between the p65 subunit and Sp1 protein. Microarray analysis of mRNA isolated after overexpression of p65 or treatment with IL-1beta revealed downregulation of alpha-smooth muscle actin and calponin mRNAs. Expression of these genes is associated with the myofibroblast phenotype. These results indicate that IL-1beta activates the nuclear localization of NF-kappaB that subsequently interacts with Sp1 to downregulate elastin transcription and expression of the myofibroblast phenotype.