Prostaglandin E2 (PGE2) is a potent local mediator of cell growth and differentiation in various tissues. The receptors for PGE2 have been classified into four pharmacological subtypes, EP1, EP2, EP3, and EP4, based on the responses to selective agonists and antagonists. We have cloned a functional cDNA for the rat EP2 receptor subtype from a rat lung cDNA library. The rat EP2 receptor cDNA encodes 357 amino acid residues having high homology with the human and mouse EP2 receptors and containing seven putative transmembrane domains. In COS-7 cells transfected with rat EP2 cDNA, specific [3H]PGE2 binding was found with a dissociation constant of 14.9 nM, and this binding was inhibited by unlabeled PGE2 and PGE2 alpha. PGE2 and butaprost, an EP2 selective agonist, were effective in increasing the cAMP level in the COS-7 cell transfectants. Northern blot and RT-PCR analysis showed widespread distribution of the EP2 receptor in various tissues. Higher EP2 expression was found in fetal long bones and calvariae than in adult by RT-PCR and in situ hybridization, suggesting a role for this receptor in rapidly growing skeletal tissue.