Chronic wounds contribute significantly to patient morbidity, mortality and associated healthcare costs. Glucocorticoid (GC) excess and hypoxia are both associated with impaired wound healing (WH) outcomes. The cyclooxygerase 2 (COX2) pathway is an integral component of inflammation and WH. Locally, GC availability is regulated by the enzyme 11β-hydroxysteroid dehydrogenase type 1 (11β-HSD1) which generates cortisol from inactive cortisone. Although we recently demonstrated that 11β-HSD1 increases during the inflammatory phase of mouse skin WH, a functional role for 11β-HSD1 in human skin remains to be established. Primary human dermal fibroblasts (HDF) were incubated±IL1β, cortisol, and cortisone for 96 h. Ten microgram/ml IL1β increased COX2 mRNA expression (by qPCR) by 36-fold** (**P<0.01), with 50 nM cortisol reducing expression by 64%**. Cortisol decreased IL1β-mediated COX2 expression by 86%**, this was prevented by 5 μM RU486** (GC receptor antagonist). Importantly, 200 nM cortisone also reduced IL1β-mediated COX2 expression by 80%** (time-dependently), this was prevented (dose-dependently) by a selective 11β-HSD1 inhibitor. However, under hypoxic conditions (1% oxygen) cortisone was unable to suppress IL1β-mediated COX2 expression. Moreover, IL1β increased 11β-HSD1 expression by 24- to ninefold** and hypoxia further enhanced this by 86%**. These data are supported by 11β-HSD1 activity assays (using trace amounts of tritium-labelled cortisone substrate), which indicated minimal cortisol generation at baseline (0.1 nM/h). IL1β induced 11β-HSD1 activity by sixfold**, generating 50 nM cortisol in 72 h (cortisol doseresponse experiments revealed a minimal concentration of 2550 nM for GC receptor activation). IL1β-mediated 11β-HSD1 activity further increased by 68%** (1.2 nM cortisol/h) under hypoxic conditions and was undetectable during co-incubation with 11β-HSD1 inhibitor. In summary, we demonstrate that the previously unreported 11β-HSD1-mediated regulation of GC target genes in HDF (e.g. COX2) may be limited in a hypoxic environment. Our findings also suggest a novel synergy between inflammation and hypoxia may drive local GC excess through increased 11β-HSD1, contributing to wound chronicity.