ETS transcription factors regulate important signaling pathways involved in cell differentiation and development in many tissues and recently have emerged as important players in prostate cancer. Inflammation has shown to be important for the initiation and the progression of prostate cancer. However, the mechanism has not been elucidated. Here, we report a novel mechanism leading to oncogenic activation of the ETS factor ESE1/ELF3 in prostate tumors. Through microarray and immunohystochemical analysis we found that ESE1/ELF3 is overexpressed in human primary and metastatic tumors. Moreover, it mediates transforming phenotypes in vitro and in vivo and induced an inflammatory transcriptome with changes in relevant oncogenic pathways. ESE1/ELF3 was induced by IL-1β through NF-κB, and was a crucial mediator of the phenotypic and transcriptional changes induced by IL-1β in prostate cancer cells. Here we report that ESE1/ELF3 interacted with the NF-κB subunits p65 and p50, enhanced their nuclear translocation and transcriptional activity and induced p50 transcription. Supporting these findings, gene expression profiling revealed an enrichment of NF-κB effector functions in prostate cancer cells or tumors expressing high levels of ESE1/ELF3. Furthermore, we observed concordant upregulation of ESE1/ELF3 and NF-κB activation in human prostate tumors that was associated with adverse prognosis in multiple cohorts of primary prostate tumors analyzed. Collectively, our results define an important new mechanistic link between inflammatory signaling and the progression of prostate cancer. Furthermore these studies indicate the possibility to apply context-dependent therapeutic strategies to a subgroup of tumors characterized by ESE1/ELF3 and NF-κB activation and with aggressive clinical features.