Bacterial peptidoglycan induces CD14-dependent activation of transcription factors CREB/ATF and AP-1. Peptidoglycan (PGN), the major cell wall component of Gram-positive bacteria, induces secretion of cytokines in macrophages through CD14, the pattern recognition receptor that binds lipopolysaccharide and other microbial products. To begin to elucidate the mechanisms that regulate the transcription of cytokine genes, we wanted to determine which transcription factors are activated by PGN in mouse RAW264.7 and human THP-1 macrophage cells. Our results demonstrated that: (i) PGN induced phosphorylation of the transcription factors ATF-1 and CREB; (ii) ATF-1 and CREB bound DNA as a dimer and induced transcriptional activation of a CRE reporter plasmid, which was inhibited by dominant negative CREB and ATF-1; (iii) PGN induced phosphorylation of c-Jun, protein synthesis of JunB and c-Fos, and transcriptional activation of the AP-1 reporter plasmid, which was inhibited by dominant negative c-Fos; and (iv) PGN-induced activation of CREB/ATF and AP-1 was mediated through CD14. This is the first study to demonstrate activation of CREB/ATF and AP-1 transcription factors by PGN or by any other component of Gram-positive bacteria.