Hematopoietic stem cell transplant patients are susceptible to infection despite cellular reconstitution. In a murine model of syngeneic bone marrow transplantation (BMT), we previously reported that BMT mice have impaired host defense against Pseudomonas aeruginosa pneumonia due to overproduction of (PG)E(2) in lung. Phosphatase and tensin homolog deleted on chromosome 10 (PTEN) is an effector in the PGE(2) signaling pathway that negatively regulates alveolar macrophage (AM) phagocytosis and bacterial killing. Therefore, examined whether overproduction of PGE(2) after BMT inhibits AM host defense by up-regulating PTEN phosphatase activity. We found that PTEN activity is elevated in BMT AMs in response to increased PGE(2) signaling and that pharmacological inhibition of PTEN activity in BMT AMs fully restores phagocytosis of serum-opsonized P. aeruginosa but only partially restores phagocytosis of nonopsonized P. aeruginosa. In wild-type mice transplanted with myeloid-specific conditional PTEN knockout (PTEN CKO) bone marrow, bacterial clearance is improved after challenge with P. aeruginosa pneumonia. Furthermore, PTEN CKO BMT AMs display improved TNF-α production and enhanced phagocytosis and killing of serum-opsonized P. aeruginosa despite overproduction of PGE(2). However, AM phagocytosis of nonopsonized P. aeruginosa is only partially restored in the absence of PTEN after BMT. This may be related to elevated AM expression of IL-1 receptor-associated kinase (IRAK)-M, a molecule previously identified in the PGE(2) signaling pathway to inhibit AM phagocytosis of nonopsonized bacteria. These data suggest that PGE(2) signaling up-regulates IRAK-M independently of PTEN and that these molecules differentially inhibit opsonized and nonopsonized phagocytosis of P. aeruginosa.