In MC3T3E1 calvarial osteoblasts, fibroblast growth factor receptor (FGFR) signaling elicits multiple transcriptional responses, including upregulation of the interstitial collagenase/matrix metallo-proteinase 1 (MMP1) promoter. FGF responsiveness maps to a bipartite Ets/AP1 element at base pairs -123 to -61 in the human MMP1 promoter. Under basal conditions, the MMP1 promoter is repressed in part via protein-DNA interactions at the Ets cognate, and minimally two mechanisms convey MMP1 promoter upregulation by FGF2: (a) transcriptional activation via Fra1/c-Jun containing DNA-protein interactions at the AP1 cognate and (b) derepression of promoter activity regulated by the Ets cognate. To identify osteoblast Ets repressors that potentially participate in gene expression in the osteoblast, we performed reverse transcription-polymerase chain reaction (RT-PCR) analysis of mRNA isolated from MC3T3E1 cells, using degenerative amplimers to the conserved Ets DNA binding domain to survey the Ets genes expressed by these cells. Six distinct Ets mRNAs were identified: Ets2, Fli1, GABPα, SAP1, Elk1, and PE1. Of these, only PE1 has extensive homology to the known Ras-regulated Ets transcriptional repressor, ERF. Therefore, we cloned and characterized PE1 cDNA from a mouse brain library and performed functional analysis of this particular Ets family member. A 2 kb transcript was isolated from brain that encodes a ~57 kDa protein; the predicted protein contains the known N-terminal Ets domain of PE1 and a novel C-terminal domain with signficant homology to murine ERF. The murine PE1 open reading frame (ORF) is much larger than the previously reported human PE1 ORF. Consistent with this, affinity-purified rabbit anti-mouse PE1 antibody specifically recognizes an ~66 kDa protein present only in the nuclear fraction of MC3T3E1 osteoblasts. Recombinant PE1 binds authentic AGGAWG Ets DNA cognates, and transient transfection studies demonstrate that PE1 represses MMP1 promoter activity. Surprisingly, although deletion of the MMP1 Ets cognate at nucleotides -88 to -83 abrogates FGF2 induction, it does not prevent suppression of the AP1-dependent MMP1 promoter by PE1. PE1 regulation maps to the MMP1 promoter region -75 to -61, suggesting that PE1 suppresses transcription via protein-protein interactions with AP1. Consistent with this, recombinant GST-PE1 specifically inhibits the formation of protein-DNA interactions on the MMP1 AP1 site (-72 to -66) when present in an admixture with MC3T3E1 crude nuclear extract. In toto, these data indicate that PE1 participates in the transcriptional regulation of the MMP1 promoter in osteoblasts. As observed with other transcriptional repressors of MMP1 gene expression, transcriptional suppression by PE1 occurs via inhibition of AP1-dependent promoter activity.