The synthesis of nitric oxide by inducible nitric-oxide synthase (iNOS) plays an important role in the innate immune response by promoting microbial killing and cell damage. In response to inflammatory cytokines and bacterial products, the human iNOS (hiNOS) gene undergoes rapid transcriptional activation via binding of stimulatory transcription factors (e.g. AP-1 and NF-kappaB) to its 5'-flanking region. However, maximal hiNOS promoter induction was suppressed via an unknown phosphatidylinositol 3-kinase (PI3K)-dependent mechanism. We hypothesized that inhibition of the transcription factor FKHRL1 by the PI3K/protein kinase B pathway attenuates hiNOS promoter induction by bacterial lipopolysaccharide and interferon-gamma (LPS/IFN-gamma). Human lung epithelial adenocarcinoma (A549) cells were transiently transfected with an 8.3-kb hiNOS promoter luciferase reporter construct. Co-expression of dominant-negative protein kinase B potentiated LPS/IFN-gamma-stimulated hiNOS promoter activity. In response to LPS/IFN-gamma, FKHRL1 was phosphorylated in a PI3K- and time-dependent fashion. Co-expression of constitutively active FKHRL1 increased hiNOS promoter activity and mRNA levels. Dominant-negative siRNA expression showed that FKHRL1 was necessary for the inhibitory effects of PI3K on hiNOS induction. The same effect was observed upon mutation of a consensus FKHRL1-binding site in the hiNOS promoter. By gel-shift analysis, the corresponding oligonucleotide probe bound endogenous FKHRL1 in an LPS/IFN-gamma- and PI3K-sensitive fashion. Regulation of the hiNOS promoter by FKHRL1 represents a potentially important molecular mechanism by which the PI3K pathway might suppress pro-inflammatory and proapoptotic responses to cytokines and bacterial products.