IL-10 is a key regulatory cytokine produced by T lymphocytes. Although Th2 cells are a major source of IL-10, little is known about IL-10 gene regulation in Th2 cells. High levels of IL-10 mRNA transcription are induced in the Th2 clone D10 after PMA plus ionomycin (P/I) stimulation; however we found that the IL-10 promoter was not inducible by P/I in D10 cells. We therefore sought regulatory regions in the IL-10 gene that could promote P/I-activated transcription in Th2 cells. Two strong DNase I-hypersensitive sites (DHSSs) were identified in the IL-10 gene in mouse T cells, and conserved noncoding sequences (CNSs) between the mouse and human IL-10 genes were also identified. One IL-10 DHSS maps within or next to a highly conserved CNS region, CNS-3. The CNS-3 region contains an AP-1 site that binds JunB and c-Jun proteins specifically in Th2 cells and not in Th1 cells. The CNS-3 element activates transcription from the IL-10 promoter after P/I stimulation and is responsive to c-Jun and JunB. Retroviral mediated-expression of either c-Jun or JunB in primary T cells led to a large increase in IL-10 expression, and inhibition of AP-1 activity by a dominant negative form of c-Jun in primary T cells strongly repressed IL-10 expression. IFN-gamma was relatively unaffected by modulations in AP-1 activity. These data indicate that we have identified a novel regulatory element that can specifically activate transcription of the IL-10 gene in Th2 cells via the AP-1/Jun pathway.