Cyclooxygenase-derived prostaglandin E(2) (PGE(2)) stimulates tumor progression by modulating several proneoplastic pathways. The mechanisms by which PGE(2) promotes tumor growth and metastasis through stimulation of cell migration, invasion, and angiogenesis have been fairly well characterized. Much less is known, however, about the molecular mechanisms responsible for the immunosuppressive effects of PGE(2). We identified PGE(2) target genes and subsequently studied their biologic role in colorectal cancer cells. The complement regulatory protein decay-accelerating factor (DAF or CD55) was induced following PGE(2) treatment of LS174T colon cancer cells. Analysis of PGE(2)-mediated activation of the DAF promoter employing 5'-deletion luciferase constructs suggests that regulation occurs at the transcriptional level via a cyclic AMP/protein kinase A-dependent pathway. Nonsteroidal anti-inflammatory drugs blocked DAF expression in HCA-7 colon cancer cells, which could be restored by the addition of exogenous PGE(2). Finally, we observed an increase in DAF expression in the intestinal mucosa of Apc(Min+/-) mice treated with PGE(2) in vivo. In summary, these results indicate a novel immunosuppressive role for PGE(2) in the development of colorectal carcinomas.