The protein phosphatase Phlpp1 is an essential enzyme for proper chondrocyte function. Altered Phlpp1 levels are associated with cancer and degenerative diseases such as osteoarthritis. While much is known about the post-transcriptional mechanisms controlling Phlpp1 levels, transcriptional regulation of the Phlpp1 gene locus is underexplored. We previously showed that CpG methylation of the PHLPP1 promoter is lower in osteoarthritic cartilage than in normal cartilage, and indirectly correlates with gene expression. Here we further defined the effects of DNA methylation on PHLPP1 promoter activity in chondrocytes. We cloned a 1791 bp fragment of the PHLPP1 promoter (-1589:+202) and found that the first 500 bp were required for maximal promoter activity. General methylation of CpG sites within this fragment significantly blunts transcriptional activity, whereas site-specific methyltransferases HhaI or HpaII decrease transcriptional activation by approximately 50%. We located putative FoxO consensus sites within the PHLPP1 promoter region. Inhibition of DNA methylation by incorporation of 5-azacytidine increases Phlpp1 mRNA levels, but FoxO inhibition abolishes this induction. To determine which FoxO transcription factor mediates Phlpp1 expression, we performed overexpression and siRNA-mediated knock down experiments. Overexpression of FoxO3a, but not FoxO1, increases Phlpp1 levels. Likewise, siRNAs targeting FoxO3a, but not FoxO1, diminished Phlpp1 levels. Last, FoxO inhibition increases glycosaminoglycan staining of cultured chondrocytes and leads to concomitant increases in FGF18 and HAS2 expression. Together, these data demonstrate that CpG methylation and FoxO3a regulate PHLPP1 expression.

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