The anti-inflammatory actions of endogenous glucocorticoids (GCs) are regulated by the activities of the GC-activating and -inactivating enzymes, 11-hydroxysteroid dehydrogenase (11-HSD)-1 and 11-HSD2, respectively, that catalyze the interconversion of the inert GC, cortisone, and its bioactive derivative, cortisol. Proinflammatory cytokines regulate 11-HSD1 expression in various cell types and, thereby, modulate the bioavailability of cortisol to the glucocorticoid receptor (GR). Since endogenous GCs reportedly attenuate the airway asthmatic response to allergen exposure, we investigated whether airway smooth muscle (ASM) exhibits cytokine-induced changes in 11-HSD1 expression that enable the ASM to regulate its own bioavailability of GC and, accordingly, the protective effect of GR signaling on airway function under pro-asthmatic conditions. Human ASM cells exposed to the primary pro-asthmatic Th2 cytokine, IL-13, exhibited upregulated expression of 11-HSD1, an effect that was attributed to activation of the transcription factor, AP-1, coupled to MAPK signaling via the ERK1/2 and JNK pathways. The induction of 11-HSD1 expression and its oxoreductase activity by IL-13 (also IL-4) served to amplify the conversion of cortisone to cortisol by the cytokine-exposed ASM and, hence, heighten GR-mediated transcriptional activation. Extended studies demonstrated that this amplified 11-HSD1-dependent GC activation enabled physiologically relevant concentrations of cortisone to exert enhanced protection of ASM tissues from the pro-asthmatic effects of IL-13 on ASM constrictor and relaxation responsiveness. Collectively, these novel findings identify a Th2 cytokine-driven homeostatic feedback mechanism in ASM that enhances its responsiveness to endogenous GCs by upregulating 11-HSD1 activity, thereby curtailing the adverse effects of the pro-asthmatic cytokine on airway function.