Epithelial cells of many mucosal organs have adapted to co-exist with microbes and microbial products. In general, most studies suggest that epithelial cells benefit from interactions with commensal microorganisms present at the lumenal surface. However, potentially injurious molecules found in this microenvironment also have the capacity to elicit local inflammatory responses and even systemic disease. We recently demonstrated that epithelial cells express the anti-infective molecule bactericidal permeability-increasing protein (BPI). Here, we extend these findings to examine molecular mechanisms of intestinal epithelial cell (IEC) BPI expression and function. Initial experiments revealed a broad variance of BPI mRNA and protein expression among various intestinal epithelial cell lines. Studies of BPI promoter expression in IEC identified regulatory regions of the BPI promoter, and revealed a prominent role for C/EBP and especially Sp1/Sp3 in basal regulation of BPI. In order to assess the functional significance of this protein we generated an IEC line stably transfected with full-length BPI. We demonstrated that while epithelia express markedly less BPI protein than neutrophils, epithelial BPI contributes to bacterial killing and attenuating bacterial-elicted proinflammatory signals. Additional studies in human and murine tissue ex vivo revealed that BPI is diffusely expressed along the crypt-villous axis, and that epithelial BPI levels decrease along the length of the intestine. Taken together, these data confirm the transcriptional regulation of BPI in intestinal epithelia and provide insight into the relevance of BPI as an anti-infective molecule at intestinal surfaces.