Although it is widely accepted that glucocorticoids (GC) are a mainstay of the treatment of diseases characterized by airway inflammation, little is known about the effects of GC on local innate immunity. In this article, we report that respiratory epithelial cells manifested a local "acute phase response" after stimulation with TLR activation and TNF-alpha and that GC spared or enhanced the epithelial expression of molecules that are involved in host defense, including complement, collectins, and other antimicrobial proteins. As expected, GC inhibited the expression of molecules responsible for inflammation such as cytokines (IFNbeta and GM-CSF) and chemokines (RANTES and IL-8). Studies using Western blotting, EMSA, and functional analysis indicated that the selective effects of GC are mediated through activation of the transcription factor C/EBP. Knockdown of C/EBPbeta by small interfering RNA blocked the enhancement by GC of host defense molecule expression but had no effect on inflammatory gene expression. These results suggest that GC spare or enhance local innate host defense responses in addition to exerting anti-inflammatory actions. It is possible that the known ability of GC to reduce the exacerbation of diseases in which infectious organisms serve as triggering factors (e.g., asthma, allergic bronchopulmonary aspergillosis, and chronic obstructive pulmonary disease) may result in part from enhanced innate immune responses in airway mucosa.