Recent studies show that NF-κB activator 1 (Act1) functions as an important adapter molecule for CD40-mediated signaling in epithelial cells. To explore the physiological function of the CD40-Act1 axis, we studied the regulation of gene expression of CD40 and Act1 both in vivo and in cell culture models. Although CD40 and Act1 are up-regulated in mouse lung upon LPS stimulation, IL-1 plus IFN-α, -β, or -γ synergistically up-regulate both CD40 and Act1 gene expression in human epithelial A549 cells. Cycloheximide superinduces the Act1 mRNA, whereas actinomycin D completely abolishes the Act1 mRNA, indicating that the induction of Act1 mRNA is at the transcriptional level and does not require protein synthesis. Promoter sequence analyses identified putative IFN regulatory factor (IRF)-1, C/EBP-β, and AP-1 transcription factor binding sites in the Act1 promoter. Although mutation of any of the three sites abolished the promoter activity, Abs against IRF-1 and C/EBP-β, but not AP-1, blocked the formation of the DNA-binding complex induced by IL-1 plus IFN-β stimulation, suggesting cooperative action between IRF-1 and C/EBP-β in mediating Act1 promoter activity. Importantly, LPS-induced gene expression of CD40 and Act1 in the mouse lung is abolished in IRF-1−/− mice, indicating an essential role of transcription factor IRF-1 in the coordinated regulation of these two genes during airway inflammation. The induced expression of the CD40-Act1 axis by inflammatory cytokines in epithelial cells probably plays an important role in priming these cells for their response to CD40 ligand during airway inflammation.