The mechanism by which prostaglandin E2 (PGE2) inhibits human T lymphocyte activation and proliferation was studied. We analyzed the effect of physiologic concentrations of PGE2 on interleukin 2 (IL 2) production, expression of IL 2 receptor (Tac antigen), and expression of the transferrin receptor after in vitro activation with phytohemagglutinin. PGE2 inhibited T lymphocyte proliferation by 80 to 90% of control values. This was associated with a similar degree of inhibition of IL 2 production while the expression of IL 2 receptor was not affected. This was in marked contrast to the expression of the transferrin receptor, which was inhibited 65% after 72 hr of in vitro activation. The addition of exogenous, purified IL 2 reconstituted lymphocyte proliferation to 50% of control values, but had no effect on transferrin receptor expression. Because PGE2 is known to increase the intracellular concentration of 3',5' cyclic adenosine monophosphate (cAMP), we investigated the effect of another adenylate cyclase activator, i.e., isoproterenol, as well as the effect of extracellular administration of the cAMP derivative dibutyryl cAMP (dBcAMP) on IL 2 production, Tac antigen expression, and transferrin receptor expression. It was demonstrated that isoproterenol, as well as dBcAMP, inhibited transferrin receptor expression on PHA-activated T lymphocytes to the same extent as PGE2, and exogenous IL 2 could not counteract the down-regulation of the receptor expression. In contrast, neither isoproterenol nor dBcAMP had any significant effect on IL 2 receptor expression. Prostaglandin F2 alpha (PGF2 alpha), which has been reported to elevate intracellular cyclic GMP levels, had no effect on lymphocyte activation and proliferation, and did not counteract the PGE2-induced depression in IL 2 production. In contrast to its effect on peripheral blood lymphocytes, PGE2 had no effect on transferrin receptor expression or cell proliferation by IL 2-dependent T cell clones and IL 2-independent T cell lines. These studies demonstrate that PGE2 exerts its inhibitory effects on T cell activation and proliferation via two distinct pathways: inhibition of IL 2 production and inhibition of transferrin receptor expression. The transferrin receptor inhibition is mediated via the cAMP pathway and is IL 2-independent.