Cleavage of heparan sulfate by the beta-D-endoglucuronidase heparanase (HPSE) is a fundamental event in a number of important physiological processes including inflammation, wound healing, and angiogenesis. HPSE activity has also been directly correlated with pathological conditions such as tumor growth and metastasis and autoimmune disease. The tight regulation of HPSE expression and function is critical to ensure homeostasis of the normal physiological processes to which it contributes and to prevent imbalance toward pathological situations. Little is known about the transcriptional mechanisms that regulate HPSE expression. In this study we have shown human HPSE gene transcription in Jurkat T cells is induced upon activation. Functional analysis of the HPSE promoter has identified a 280-bp region that is highly inducible. Mutation studies together with supershift experiments have identified a 4-bp motif that binds the transcription factor early growth response-1 (Egr1) and is critical in regulating inducible HPSE gene transcription. Furthermore, the overexpression of Egr1 resulted in the enhanced activation of the HPSE promoter. By using MAPK pathway inhibitors, we have also shown that inducible expression of HPSE mRNA and the activity of the 280-bp HPSE promoter element are dependent on the ERK1/2 (MEK1/2) pathway. This pathway is critical for induction of Egr1 expression at both the mRNA and protein level in T cells, an observation that provides further support to Egr1 playing an important role as a key activator of HPSE expression. In addition, HPSE and Egr1 were shown to co-localize by immunohistochemistry to invading mononuclear leukocytes in actively induced experimental autoimmune encephalomyelitis in rats. These findings provide the first insight into the mechanisms controlling inducible transcription of the HPSE gene, and could represent an important lead into understanding how HPSE expression is deregulated in metastatic tumor cells.