The enzyme 11beta-hydroxysteroid dehydrogenase type 1 (11-HSD1) catalyzes the conversion of inactive to active glucocorticoids. 11-HSD1 plays a crucial role in the pathogenesis of obesity and controls glucocorticoid actions in inflammation. Several studies have demonstrated that TNF increases 11-HSD1 mRNA and activity in various cell models. Here, we demonstrate that mRNA and activity of 11-HSD1 is increased in liver tissue from transgenic mice overexpressing TNF, indicating that this effect also occurs in vivo. In order to dissect the molecular mechanism of this increase, we investigated basal and TNF-induced transcription of the 11-HSD1 gene (HSD11B1) in HepG2 cells. We found that TNF acts via p38 MAP kinase pathway. Transient transfections with variable lengths of human HSD11B1 promoter revealed highest activity with or without TNF in the proximal promoter region (-180 to +74). Co-transfection with human C/EBP and C/EBP-LAP expression vectors activated the HSD11B1 promoter with the strongest effect within the same region. Gel shift and RNA interference assays revealed the involvement of mainly C/EBP, but also C/EBP, in basal and only of C/EBP in the TNF-induced HSD11B1 expression. Chromatin immunoprecipitation assay confirmed in vivo the increased abundance of C/EBP on the proximal HSD11B1 promoter upon TNF treatment. In conclusion, C/EBP and C/EBP control basal transcription and TNF upregulates 11-HSD1, most likely by p38 MAP kinase-mediated increased binding of C/EBP to the human HSD11B1 promoter. To our knowledge, this is the first study showing involvement of p38 MAPK in the TNF-mediated 11-HSD1 regulation, and that TNF stimulates enzyme activity in vivo.