Inflammatory cytokines down-regulate the barrier-protective prostasin-matriptase proteolytic cascade early in experimental colitis. Compromised gastrointestinal barrier function is strongly associated with the progressive and destructive pathologies of the two main forms of irritable bowel disease (IBD), ulcerative colitis (UC), and Crohn's disease (CD). Matriptase is a membrane-anchored serine protease encoded by suppression of tumorigenicity-14 (ST14) gene, which is critical for epithelial barrier development and homeostasis. Matriptase barrier-protective activity is linked with the glycosylphosphatidylinositol (GPI)-anchored serine protease prostasin, which is a co-factor for matriptase zymogen activation. Here we show that mRNA and protein expression of both matriptase and prostasin are rapidly down-regulated in the initiating inflammatory phases of dextran sulfate sodium (DSS)-induced experimental colitis in mice, and, significantly, the loss of these proteases precedes the appearance of clinical symptoms, suggesting their loss may contribute to disease susceptibility. We used heterozygous St14 hypomorphic mice expressing a promoter-linked β-gal reporter to show that inflammatory colitis suppresses the activity of the St14 gene promoter. Studies in colonic T84 cell monolayers revealed that barrier disruption by the colitis-associated Th2-type cytokines, IL-4 and IL-13, down-regulates matriptase as well as prostasin through phosphorylation of the transcriptional regulator STAT6 and that inhibition of STAT6 with suberoylanilide hydroxamic acid (SAHA) restores protease expression and reverses cytokine-induced barrier dysfunction. Both matriptase and prostasin are significantly down-regulated in colonic tissues from human subjects with active ulcerative colitis or Crohn's disease, implicating the loss of this barrier-protective protease pathway in the pathogenesis of irritable bowel disease.