Prostaglandins (PGs) are abundant in bone and are potent regulators of bone cell function. Osteoblasts produce PGs, and this production is highly regulated by local and systemic factors. Bone resorption is a highly regulated process involving interactions of osteoclastic precursors with osteoblasts or stromal cells. Many factors that stimulate PGs production also stimulate resorption in organ and marrow culture. Cyclooxygenase (COX) is the rate-limiting enzyme in the conversion of arachidonic acid to PGs. There are two forms of COX, COX-1 and COX-2. COX-2 is an inducible primary-response or immediate early gene. COX-2 expression is induced by many factors through the transcriptional pathway in osteoblasts. Stimulated production of PGs by osteoblasts requires both the induction of COX-2 expression and the availability of arachidonic acid substrate. PGs are complex, potent regulators of bone cell function in vivo. PGE2, which may be the most important local eicosanoid in skeletal regulation, can stimulate resorption. We report that COX-2 expression and associated PG production are necessary for maximal resorption responses to 1,25 (OH)2D3 and parathyroid hormone (PTH). PGs can increase osteoclast formation by enhancing induction of the receptor activator of nuclear factor-kappa B ligand (RANKL) expression in osteoblasts and enhancing the action of RANKL on osteoclast precursors by inhibiting granulocyte macropharge-colony stimulating factor (GM-CSF). In vitro, PGE2 can stimulate the differentiation of both osteoblasts and osteoclasts, and the net balance of these two effects under physiologic or pathologic conditions in vivo is not yet clear. Our in vivo data suggest that a role for COX-2 in bone resorption may be most evident when bone resorption is accelerated. Some of the complexity of PG actions on bone can be explained by the multiplicity of receptors for PGs. There are at least four distinct receptors for PGE2 with differential signaling pathways that have not yet been fully elucidated. Further studies are needed to clarify the specific pathways of PGs action in bone. Once this is accomplished, it may be possible to identify therapeutic applications of manipulating PGs in skeletal disorders.