The osteoinductive properties of prostaglandin E2 (PGE2) and its signaling pathways have led to suggestions that it may serve as a potential therapeutic strategy for bone loss. However, the prominence of PGE2 as an inducer of bone formation is attributed primarily to findings from studies using rodent models. In the current study, we investigated the effects of PGE2 on human bone marrow stromal cell (hBMSC) lineage commitment and determined its mode of action. We demonstrated that PGE2 treatment of hBMSCs significantly altered the expression profile of several genes associated with osteoblast differentiation (RUNX2 and ALP) and maturation (BGLAP and MGP). This was attributed to the activation of specific PGE2 receptors, and was associated with increases in cAMP production and sustained AKT phosphorylation. Pharmacological inhibition of exchange protein directly activated by cAMP (Epac), but not protein kinase A (PKA), recovered the mineralization functions of hBMSC-derived osteoblasts treated with PGE2 and restored AKT phosphorylation, along with the expression levels of RUNX2, ALP, BGLAP and MGP. Our findings therefore provide insights into how PGE2 influences hBMSC-mediated matrix mineralization, and should be taken into account when evaluating the role of PGE2 in human bone metabolism.