Angiogenesis is a critical component of the inflammatory response associated with a number of conditions. Angiopoietin-1 (Ang-1) is an angiogenic growth factor that promotes the chemotaxis of endothelial cells and facilitates the maturation of new blood vessels. Ang-1 expression is up-regulated in response to tumor necrosis factor-alpha (TNF-alpha). To begin to elucidate the underlying molecular mechanisms by which Ang-1 gene expression is regulated during inflammation, we isolated 3.2 kb of the Ang-1 promoter that contain regulatory elements sufficient to mediate induction of the promoter in response to TNF-alpha, interleukin-1beta, and endotoxin. Surprisingly, sequence analysis of this promoter failed to reveal binding sites for transcription factors that are frequently associated with mediating inflammatory responses, such as NF-kappaB, STAT, NFAT, or C/EBP. However, putative binding sites for ETS and AP-1 transcription factor family members were identified. Interestingly, among a panel of ETS factors tested in a transient transfection assay, only the ETS factor ESE-1 was capable of transactivating the Ang-1 promoter. ESE-1 binds to specific ETS sites within the Ang-1 promoter that are functionally important for transactivation by ESE-1. ESE-1 and Ang-1 are induced in synovial fibroblasts in response to inflammatory cytokines, with ESE-1 induction slightly preceding that of Ang-1. Mutation of a high-affinity ESE-1 binding site leads to a marked reduction in Ang-1 transactivation by ESE-1, inducibility by inflammatory cytokines, and DNA binding to the ESE-1 protein. Transcriptional profiling of cells transiently transfected with an ESE-1 expression vector demonstrates that the endogenous Ang-1 gene is directly inducible by ESE-1. Finally, Ang-1 and ESE-1 exhibit a similar and strong expression pattern in the synovium of patients with rheumatoid arthritis. Our results support a novel paradigm for the ETS factor ESE-1 as a transcriptional mediator of angiogenesis in the setting of inflammation.