Xylosyltransferase I (XT-I) is an essential enzyme of proteoglycan (PG) biosynthesis pathway catalyzing the initial and rate-limiting step in glycosaminoglycan chain assembly. It plays a critical role in the regulation of PG synthesis in cartilage; however, little is known about underlying mechanism. Here, we provide evidence that, in human primary chondrocytes, IL-1β regulates XT-I gene expression into an early phase of induction and a late phase of down-regulation. Based on promoter deletions, the region up to -850 bp was defined as a major element of XT-I gene displaying both constitutive and IL-1β-regulated promoter activity. Point mutation and signaling analyses revealed that IL-1β-induced promoter activity is achieved through AP-1 response elements and mediated by SAP/JNK and p38 signaling pathways. Transactivation and chromatin immunoprecipitation assays indicated that AP-1 is a potent transactivator of XT-I promoter and that IL-1β-induced activity is mediated through increased recruitment of AP-1 to the promoter. Finally, we show that Sp3 is a repressor of XT-I promoter and bring evidence that the repressive effect of IL-1β during the late phase is mediated through Sp3 recruitment to the promoter. This suggests that modulation of Sp3 in cartilage could prevent IL-1β inhibition of PG synthesis and limit tissue degradation.