Arginase I expression in the liver must remain constant throughout life to eliminate excess nitrogen via the urea cycle. In contrast, arginase I expression in macrophages is silent until signals from Th2 cytokines such as IL-4 and IL-13 are received and the mRNA is then induced four to five orders of magnitude. Arginase I is hypothesized to play a regulatory and potentially pathogenic role in diseases such as asthma, parasitic, bacterial, and worm infections by modulating NO levels and promoting fibrosis. We show that Th2-inducible arginase I expression in mouse macrophages is controlled by an enhancer that lies -3 kb from the basal promoter. PU.1, IL-4-induced STAT6, and C/EBPbeta assemble at the enhancer and await the effect of another STAT6-regulated protein(s) that must be synthesized de novo. Identification of a powerful extrahepatic regulatory enhancer for arginase I provides potential to manipulate arginase I activity in immune cells while sparing liver urea cycle function.