Chronic hypoxia and inflammatory cytokines are hallmarks of inflammatory joint diseases like rheumatoid arthritis (RA), suggesting a link between this microenvironment and central pathological events. Because TACE/ADAM17 is the predominant protease catalyzing the release of tumor necrosis factor alpha (TNFalpha), a cytokine that triggers a cascade of events leading to RA, we examined the regulation of this metalloprotease in response to hypoxia and TNFalpha itself. We report that low oxygen concentrations and TNFalpha enhance TACE mRNA levels in synovial cells through direct binding of hypoxia-inducible factor-1 (HIF-1) to the 5' promoter region. This is associated with elevated TACE activity as shown by the increase in TNFalpha shedding rate. By the use of HIF-1-deficient cells and by obliterating NF-kappaB activation, it was determined that the hypoxic TACE response is mediated by HIF-1 signaling, whereas the regulation by TNFalpha also requires NF-kappaB activation. As a support for the in vivo relevance of the HIF-1 axis for TACE regulation, immunohistological analysis of TACE and HIF-1 expression in RA synovium indicates that TACE is up-regulated in both fibroblast- and macrophage-like synovial cells where it localizes with elevated expression of both HIF-1 and TNFalpha. These findings suggest a mechanism by which TACE is increased in RA-affected joints. They also provide novel mechanistic clues on the influence of the hypoxic and inflammatory microenvironment on joint diseases.