The suppression of hypoxia-induced erythropoietin (EPO) expression by inflammatory cytokines like interleukin-1 (IL-1) contributes to the development of the anemia of chronic disease (ACD). However, the precise mechanism of this suppression is unclear. The 3'-EPO enhancer mediates the transcriptional response to hypoxia by binding several transcription factors, including hypoxia-inducible factor, hepatocyte nuclear factor-4alpha (HNF-4alpha) and chicken ovalbumin upstream promoter transcription factor. We investigated whether IL-1beta inhibits the activity of the 3'-EPO enhancer via HNF-4alpha. IL-1beta inhibited HNF-4alpha mRNA expression and caused proteasome-dependent degradation of HNF-4alpha protein, which resulted in a strongly reduced DNA-binding activity of HNF-4alpha. Reporter gene assays revealed that IL-1beta caused a complete suppression of the hypoxic inducibility of the 3' enhancer via inhibition of HNF-4alpha. We conclude that IL-1beta, at least partially, reduces hypoxia-induced EPO expression by down-regulation of HNF-4alpha.