The net balance of neutrophil elastase and its inhibitor, α1-antitrypsin (α1-AT), is a critical determinant of connective tissue turnover during homeostasis and in disease states. In addition to liver-derived á1-AT, which translocates from blood to tissues, this elastase-α1-AT balance is maintained by expression of α-AT at the local tissue level in resident mononuclear phagocytes. Our previous studies have shown that this elastase-α1-AT balance is also tightly controlled at a cellular level in that addition of exogenous neutrophil elastase (serpine-type elastase) to cultured mononuclear phagocytes is associated with an increase in expression of the α1-AT gene. Subsequent studies have demonstrated that this novel regulatory loop involves interaction between exogenous neutrophil elastase and endogenous α1-AT inducing a structural rearrangement in the α1-AT molecule and exposing highly conserved conformation-specific domain of α1-AT, which can then be recognized by a specific cell surface receptor, the serpinenzyme complex receptor. In the following study, we examined the effect of a bacterial metalloelastase,Pseudomonas aeruginosaelastase, on expression of α1-AT in human mononuclear phagocytes. We show that pseudomonas elastase inactivates monocyte-derived α1-AT by limited proteolysis but, in so doing, á1-AT becomes recognized by the serpin-enzyme complex receptor and mediates an increase in de novo synthesis of á1-AT in these cells. However, the concentrations of pseudomonas elastase needed to proteolytically inactivate á1-AT in monocyte culture fluid are higher than those required for inactivation of purified plasma á1-AT. Results of experiments in this report show that this can be explained, at least in part, by binding of pseudomonas elastase to another endogenous protease inhibitor, α2-macroglobulin. Thus, the results of this study further define the elaborate mechanisms by which the host mononuclear phagocyte controls the elastase-α1-AT balance and, in turn, connective tissue turnover. (Pediatr Res29:133–140, 1991)