CCN2 (connective tissue growth factor), an important regulator of angiogenesis, chondrogenesis, and wound healing, is overexpressed in a majority of fibrotic diseases and in various tumors. This study investigated regulation of CCN2 gene expression by Ets family of transcription factors, focusing on two members, Fli1 and Ets1, with deregulated expression during fibrosis and tumorigenesis. We show that Ets1 and Fli1 have opposite effects on CCN2 gene expression. Ets1 functions as an activator of CCN2 transcription, whereas Fli1 acts as a repressor. A functional Ets binding site was mapped at -114 within the CCN2 promoter. This site not only mediates stimulation by Ets factors, including Ets1, Ets2, and GABPalpha/beta, but is also required for the transforming growth factor (TGF)-beta response. The contrasting functions of Ets1 and Fli1 in regulation of the CCN2 gene were confirmed by suppressing their endogenous levels using adenoviral vectors expressing specific small interfering RNAs. Additional experiments using chromatin immunoprecipitation assays have revealed that in fibroblasts both Ets1 and Fli1 occupy the CCN2 promoter. TGF-beta stimulation resulted in displacement of Fli1 from the CCN2 promoter and a transient inhibition of Fli1 synthesis. Moreover, reduction of Fli1 expression resulted in up-regulation of COL1A1 and COL1A2 genes and down-regulation of the MMP1 gene. Thus, inhibition of Fli1 recapitulated some of the key effects of TGF-beta, suggesting that Fli1 suppression is involved in activation of the profibrotic gene program in fibroblasts. On the other hand, activation of the CCN2 gene downstream of Ets1 is consistent with its role in angiogenesis and extracellular matrix remodeling. This study strongly supports a critical role of Fli1 and Ets1 in the pathological extracellular matrix regulation during fibrosis and cancer.