Studies show that elevated insulin‐like growth factor‐1 (IGF‐1) levels are associated with an increased risk of breast cancer; however, mechanisms through which IGF‐1 promotes mammary tumorigenesis in vivo have not been fully elucidated. To assess the possible involvement of COX‐2 signaling in the pro‐tumorigenic effects of IGF‐1 in mammary glands, we used the unique BK5.IGF‐1 mouse model in which transgenic (Tg) mice have significantly increased incidence of spontaneous and DMBA‐induced mammary cancer compared to wild type (WT) littermates. Studies revealed that COX‐2 expression was significantly increased in Tg mammary glands and tumors, compared to age‐matched WTs. Consistent with this, PGE₂ levels were also increased in Tg mammary glands. Analysis of expression of the EP receptors that mediate the effects of PGE₂ showed that among the four G‐protein‐coupled receptors, EP3 expression was elevated in Tg glands. Up‐regulation of the COX‐2/PGE₂/EP3 pathway was accompanied by increased expression of VEGF and a striking enhancement of angiogenesis in IGF‐1 Tg mammary glands. Treatment with celecoxib, a selective COX‐2 inhibitor, caused a 45% reduction in mammary PGE₂ levels, attenuated the influx of mast cells and reduced vascularization in Tg glands. These findings indicate that the COX‐2/PGE₂/EP3 signaling pathway is involved in IGF‐1‐stimulated mammary tumorigenesis and that COX‐2‐selective inhibitors may be useful in the prevention or treatment of breast cancer associated with elevated IGF‐1 levels in humans. © 2011 Wiley Periodicals, Inc.