Extracellular matrix (ECM) formation and remodeling are critical processes for proper morphogenesis, organogenesis, and tissue repair. The proinflammatory cytokine tumor necrosis factor alpha (TNF-alpha) inhibits ECM accumulation by stimulating the expression of matrix proteolytic enzymes and by downregulating the deposition of structural macromolecules such as type I collagen. Stimulation of ECM degradation has been linked to prolonged activation of jun gene expression by the cytokine. Here we demonstrate that TNF-alpha inhibits transcription of the gene coding for the alpha2 chain of type I collagen [alpha2(I) collagen] in cultured fibroblasts by stimulating the synthesis and binding of repressive CCAAT/enhancer proteins (C/EBPs) to a previously identified TNF-alpha-responsive element. This conclusion was based on the concomitant identification of C/EBPbeta and C/EBPdelta as TNF-alpha-induced factors by biochemical purification and expression library screening. It was further supported by the ability of the C/EBP-specific dominant-negative (DN) protein to block TNF-alpha inhibition of alpha2(I) collagen but not TNF-alpha stimulation of the MMP-13 protease. The DN protein also blocked TNF-alpha downregulation of the gene coding for the alpha1 chain of type I collagen. The study therefore implicates repressive C/EBPs in the TNF-alpha-induced signaling pathway that controls ECM formation and remodeling.