Secretoglobin (SCGB) 3A1 and 3A2 are members of the small molecular weight secretoglobin gene superfamily. SCGB3A1 is a tumor suppressor gene, whereas SCGB3A2 has anti-inflammatory properties. Both genes are mainly expressed in the lung and trachea in mice. Whether the expression and/or function of these two genes are related is not known. Here we show that the expression of SCGB3A1 and SCGB3A2 are bidirectionally regulated by oncostatin M (OSM) when examined in a mouse transformed Clara cell line (mtCC); SCGB3A1 is up-regulated by OSM, while SCGB3A2 is down-regulated in a time- and dose-dependent manner. OSM-activated STAT3/5, through binding to the STAT-binding element located at -201 to -209 bp in the mouse Scgb3a1 gene promoter, and the extracellular signal-regulated kinase (ERK)- and p38-mitogen-activated protein kinase (MAPK) pathways are responsible for the OSM-induced up-regulation of SCGB3A1 expression. On the other hand, the -113 to -273 bp region in the Scgb3a2 promoter appears to be responsible for the OSM induced down-regulation of the gene. No significant differences in the levels or patterns of specific DNA-binding proteins were found in the -113 to -273 bp region as determined by electrophoretic mobility shift assays. Neither the ERK- nor p38-MAPK pathways were involved in the OSM-induced reduction of Scgb3a2 promoter activity. These results suggest that OSM-induced suppression of SCGB3A2 expression is an indirect effect of OSM. Expression of the Clara cell marker, CYP2F2, was markedly decreased upon OSM treatment in parallel with the decrease of SCGB3A2 expression in mtCC cells. The differential regulation of Scgb3a1 and Scgb3a2 gene expression by OSM may explain the unique functions of these genes in the lung.