Matrix metalloproteinase-3 (MMP-3) over-expression is associated with tissue destruction in the context of chronic inflammation. Previous studies showed that IL-4 inhibits induction of MMP-3 by IL-1β, and suggested that AP-1 might be involved. Here we show that IL-1 induced binding of transcription factor AP-1 to the MMP-3 promoter consists primarily of c-Jun, JunB, and c-Fos and that binding of c-Jun and c-Fos is inhibited by the combination of cytokines while binding of Jun B is not. Mutation of the AP-1 site in the MMP-3 promoter decreased the ability of IL-4 to inhibit its transcription in transfected MG-63 cells. Western blotting showed that both cytokines activate Jun N-terminal kinase (JNK), but with somewhat different kinetics, and that activation of JNK by both cytokines individually is inhibited by the combination. These results indicate that IL-4 inhibition of MMP-3 expression is associated with reduction of IL-1 induced binding of active forms of the AP-1 dimer, while less active JunB-containing dimers remain, and suggest that these changes are associated with decreased activation of JNK.