An increased migratory phenotype exists in lung fibroblasts derived from patients with fibroproliferative lung disease. Prostaglandin E₂ (PGE₂) suppresses fibroblast migration, but the receptor(s) and mechanism(s) mediating this action are unknown. Our data confirm that treatment of human lung fibroblasts with PGE₂ inhibits migration. Similar effects of butaprost, an E-prostanoid (EP) 2 receptor–specific ligand, implicate the EP2 receptor in migration-inhibitory signaling. Further, migration in fibroblasts deficient for the EP2 receptor cannot be inhibited by PGE₂ or butaprost, confirming the central role of EP2 in mediating these effects. Our previous data suggested that phosphatase and tensin homolog on chromosome ten (PTEN), a phosphatase that opposes the actions of phosphatidylinositol-3-kinase (PI3K), may be important in regulating lung fibroblast motility. We now report that both PGE₂ and butaprost increase PTEN phosphatase activity, without a concomitant increase in PTEN protein levels. This contributes to EP2-mediated migration inhibition, because migration in PTEN-null fibroblasts is similarly unaffected by EP2 receptor signaling. Increased PTEN activity in response to EP2 stimulation is associated with decreased tyrosine phosphorylation on PTEN, a mechanism known to regulate enzyme activity. Collectively, these data describe the novel mechanistic finding that PGE₂, via the EP2 receptor, decreases tyrosine phosphorylation on PTEN, resulting in increased PTEN enzyme activity and inhibition of fibroblast migration.