The chemokine TARC is a ligand for the chemokine receptor CCR4 expressed on T helper (Th)2-type CD4 T cells. Allergic airway inflammation is characterized by a local increase in cells secreting Th2-type cytokines. We hypothesized that bronchial epithelial cells may be a source of chemokines known to chemoattract Th2 cells. Regulated TARC expression was studied using normal human bronchial epithelial cells and a human lung xenograft model. TARC expression was increased in normal human bronchial epithelial cells in response to tumor necrosis factor-alpha stimulation, and further upregulation of TARC was observed with interferon (IFN)-gamma but not interleukin (IL)-4 costimulation. TARC functions as a nuclear factor (NF)-kappa B target gene, as shown by the abrogation of TARC expression in response to proinflammatory stimuli when NF-kappa B activation is inhibited. In an in vivo model, minimal constitutive TARC expression was observed in human lung xenografts. Consistent with our findings in vitro, TARC messenger RNA (mRNA) expression was upregulated in the xenografts in response to IL-1, and costimulation with IFN-gamma but not IL-4 further increased TARC mRNA and protein expression. In addition, bronchoalveolar lavage fluid from asthmatic subjects after allergen challenge contained significantly increased levels of TARC, suggesting that TARC production by bronchial epithelial cells may play a role in the pathogenesis of allergic asthma.