Heme oxygenase (HO)-1 is a cytoprotective enzyme with anti-inflammatory properties. HO-1 is induced during a systemic inflammatory response, and expression of HO-1 is beneficial during sepsis of a Gram-positive source. Systemic infection from Gram-positive organisms has emerged as an important cause of sepsis, with Staphylococcus aureus as a common etiology. An important mediator of Gram-positive infections is peptidoglycan (PGN), a cell wall component of these organisms. Here, we demonstrate that HO-1 played an important, protective role in vivo, as mice deficient in HO-1 were very sensitive to the lethal effects of PGN derived from S. aureus. PGN induced HO-1 protein and mRNA levels, and this regulation occurred at the level of gene transcription. The PGN-responsive region of the HO-1 promoter (from -117 to -66 bp) contains a functional EBS, and Ets proteins are known to be involved in the regulation of inflammatory responses. We showed previously that Ets factors (activators Ets-2 and Ets-1 and repressor Elk-3) regulate HO-1 expression by Gram-negative endotoxin. However, during exposure to a Gram-positive stimulus in the present study, Elk-1 was a potent activator of HO-1 in conjunction with PGN. The ability of Elk-1 to induce HO-1 promoter activity was independent of direct DNA binding, but rather occurred by interacting with the CCAAT/enhancer-binding protein-alpha (C/EBPalpha), which binds to DNA. Moreover, silencing of C/EBPalpha in macrophages prevented induction of HO-1 promoter activity by either Elk-1 or PGN. These data provide further insight into the regulation and function of HO-1 by a mediator of Gram-positive bacteria.