Epithelium-specific ETS (ESE)-1 is a prototypic member of a novel subset of the ETS transcription factor family that is predominantly expressed in cells of epithelial origin but can also be induced in other cell types including vascular endothelial and smooth muscle cells in response to inflammatory stimuli. To further define the molecular mechanisms by which the transcriptional activity of ESE-1 is regulated, we have focused our attention on identifying proteins that interact with ESE-1. We have determined that Ku70, Ku86, p300, and CREB-binding protein (CBP) are ESE-1 interacting proteins. The Ku proteins have previously been shown to bind to breaks in DNA where they function to recruit additional proteins that promote DNA repair. Interestingly, Ku70 and Ku 86 negatively regulate the transcriptional activity of ESE-1. Using a series of deletion constructs, we have determined that the Ku proteins bind to the DNA-binding domain of ESE-1. The Ku proteins inhibit the ability of ESE-1 to bind to oligonucleotide probes in gel mobility shift assays. The finding that Ku proteins can interact with other transcription factors and block their function has not been previously demonstrated. In contrast, co-transfection of p300 and CBP with ESE-1 enhances the transcriptional activity of ESE-1. Moreover, the induction of ESE-1 in response to inflammatory cytokine interleukin-1 is associated with a parallel increase of the expression of p300 in vascular endothelial cells, suggesting that in the setting of inflammation, the transcriptional activity of ESE-1 is positively modulated by interaction with the transcriptional co-activator p300. In summary, our results demonstrated that the activity of ESE-1 is positively and negatively modulated by other interacting proteins including Ku70, Ku86, p300, and CBP.