Prostaglandin E₂(PGE₂) is an anabolic agent in vivo that stimulates bone formation by recruiting osteoblasts from bone marrow precursors. To understand which of the known PGE₂ receptors (EP_1–4) is involved in this process, we tested the effect of PGE₂ and various EP agonists and/or antagonists on osteoblastic differentiation in cultures of bone marrow cells by counting bone nodules and measuring alkaline phosphatase activity. PGE₂increased both parameters, peaking at 100 nM, an effect that was mimicked by forskolin and was abolished by 2′,3′-dideoxyadenosine (an adenylate cyclase inhibitor) and was thus cAMP dependent, pointing to the involvement of EP₂ or EP₄. Consistently, 17-phenyl-ω-trinor PGE₂(EP₁ agonist) and sulprostone (EP₃/EP₁agonist) lacked any anabolic activity. Furthermore, butaprost (EP₂ agonist) was inactive, 11-deoxy-PGE₁(EP₄/EP₂agonist) was as effective as PGE₂, and the PGE₂ effect was abolished dose dependently by the selective EP₄ antagonist AH-23848B, suggesting the involvement of EP₄. We also found that PGE₂ increased nodule formation and AP activity when added for the initial attachment period of 24 h only. Thus this study shows that PGE₂ stimulates osteoblastic differentiation in bone marrow cultures, probably by activating the EP₄ receptor, and that this effect may involve recruitment of noncommitted (nonadherent) osteogenic precursors, in agreement with its suggested mode of operation in vivo.