RET/PTC rearrangements are believed to be tumor-initiating events in papillary thyroid carcinomas. We identified microsomal prostaglandin E2 synthase-1 (mPGES-1) as a RET/PTC-inducible gene through subtraction hybridization cloning and expression profiling with custom microarrays. The inducible prostaglandin E2 (PGE2) biosynthetic enzymes cyclooxygenase-2 (COX-2) and mPGES-1 are up-regulated in many cancers. COX-2 is overexpressed in thyroid malignancies compared with benign nodules and normal thyroid tissues. Eicosanoids may promote tumorigenesis through effects on tumor cell growth, immune surveillance, and angiogenesis. Conditional RET/PTC1 or RET/PTC3 expression in PCCL3 thyroid cells markedly induced mPGES-1 and COX-2. PGE2 was the principal prostanoid and up-regulated (by approximately 60-fold), whereas hydroxyeicosatetraenoic acid metabolites were decreased, consistent with shunting of prostanoid biosynthesis toward PGE2 by coactivation of the two enzymes. RET/PTC activated mPGES-1 gene transcription. Based on experiments with kinase inhibitors, with PCCL3 cell lines with doxycycline-inducible expression of RET/PTC mutants with substitutions of critical tyrosine residues in the kinase domain, and lines with inducible expression of activated mutants of H-RAS and MEK1, RET/PTC was found to regulate mPGES-1 through Shc-RAS-MEK-ERK. These data show a direct relationship between activation of a tyrosine kinase receptor oncogene and regulation of PGE2 biosynthesis. As enzymes involved in prostanoid biosynthesis can be targeted with pharmacological inhibitors, these findings may have therapeutic implications.