The fibroproliferative response to acute lung injury (ALI) results in severe, persistent respiratory dysfunction. We have reported that IL-1beta is elevated in pulmonary edema fluid in those with ALI and mediates an autocrine-acting, fibroblast mitogenic pathway. In this study, we examine the role of IL-1beta-mediated induction of cyclooxygenase-2 and PGE2, and evaluate the significance of individual E prostanoid (EP) receptors in mediating the fibroproliferative effects of IL-1beta in ALI. Blocking studies on human lung fibroblasts indicate that IL-1beta is the major cyclooxygenase-2 mRNA and PGE2-inducing factor in pulmonary edema fluid and accounts for the differential PGE2 induction noted in samples from ALI patients. Surprisingly, we found that PGE2 produced by IL-1beta-stimulated fibroblasts enhances fibroblast proliferation. Further studies revealed that the effect of fibroblast proliferation is biphasic, with the promitogenic effect of PGE2 noted at concentrations close to that detected in pulmonary edema fluid from ALI patients. The suppressive effects of PGE2 were mimicked by the EP2-selective receptor agonist, butaprost, by cAMP activation, and were lost in murine lung fibroblasts that lack EP2. Conversely, the promitogenic effects of mid-range concentrations of PGE2 were mimicked by the EP3-selective agent, sulprostone, by cAMP reduction, and lost upon inhibition of Gi-mediated signaling with pertussis toxin. Taken together, these data demonstrate that PGE2 can stimulate or inhibit fibroblast proliferation at clinically relevant concentrations, via preferential signaling through EP3 or EP2 receptors, respectively. Such mechanisms may drive the fibroproliferative response to ALI.