Prostasin is a glycosylphosphatidylinositol-anchored serine protease, with epithelial sodium channel (ENaC) activation and tumor invasion suppression activities. We have identified the bladder as an expression site of prostasin. In the mouse, prostasin mRNA expression was detected by reverse transcription and real-time polymerase chain reaction in the bladder, and the prostasin protein was localized by immunohistochemistry in the urothelial cells. In mice injected intraperitoneally with bacterial lipopolysaccharide (LPS), bladder prostasin mRNA expression was down-regulated, while the expression of inducible nitric oxide synthase (iNOS), cyclooxygenase-2 (COX-2), interferon gamma (IFN), tumor necrosis factor alpha (TNF), interleukin-1 beta (IL-1), and interleukin-6 (IL-6) was up-regulated. Viral promoter-driven expression of the human prostasin homologue in the bladder of transgenic mice attenuated the LPS induction of iNOS, but did not abolish the induction. LPS induction of COX-2, TNF, IL-1, and IL-6 expression, however, was not reduced by prostasin transgene expression. Liposome-mediated delivery of prostasin-expressing plasmid into mouse bladder produced similar attenuation effects on LPS-induced iNOS expression, while not affecting COX-2 or cytokine induction. Mice receiving plasmid expressing a catalytic mutant prostasin did not manifest the iNOS-induction attenuation phenotype. We propose a proteolytic mechanism for prostasin to intercept the cytokine signaling during LPS-induced bladder inflammation.