The expression of alpha(1)-antichymotrypsin (ACT) is significantly enhanced in affected brain regions in Alzheimer's disease. This serine proteinase inhibitor specifically colocalizes with filamentous beta-amyloid deposits and recently has been shown to influence both formation and destabilization of beta-amyloid fibrils. In the brain, ACT is expressed in astrocytes, and interleukin-1 (IL-1), tumor necrosis factor alpha (TNF), oncostatin M (OSM), and IL-6/soluble IL-6 receptor complexes control synthesis of this inhibitor. Here, we characterize a molecular mechanism responsible for both IL-1 and TNF-induced expression of ACT gene in astrocytes. We identify the 5' distal IL-1/TNF-responsive enhancer of the ACT gene located 13 kb upstream of the transcription start site. This 413-bp-long enhancer contains three elements, two of which bind nuclear factor kB (NF-kB) and one that binds activating protein 1 (AP-1). All of these elements contribute to the full responsiveness of the ACT gene to both cytokines, as determined by deletion and mutational analysis. The 5' NF-kB high-affinity binding site and AP-1 element contribute most to the enhancement of gene transcription in response to TNF and IL-1. In addition, we demonstrate that the 5' untranslated region of the ACT mRNA does not contribute to cytokine-mediated activation. Finally, we find that overexpression of the NF-kB inhibitor (IkB) totally inhibits any activation mediated by the newly identified IL-1/TNF enhancer of the ACT gene.