Prostaglandin E2 (PGE2) has been proposed to be a potent stimulator of bone resorption. However, PGE2 itself has been shown to directly inhibit bone-resorbing activity of osteoclasts. We examined the role of PGE2 in the function of mouse osteoclasts formed in vitro. Bone marrow macrophage osteoclast precursors expressed PGE2 receptors EP1, EP2, EP3beta, and EP4, and the expression of EP2 and EP4 was down-regulated during osteoclastic differentiation induced by receptor activator of NF-kappaB ligand and macrophage colony-stimulating factor. In contrast, functional EP1 was continuously expressed in mature osteoclasts. PGE2 as well as calcitonin caused intracellular Ca2+ influx in osteoclasts. However, PGE2 and 17-phenyltrinol-PGE2 (an EP1 agonist) failed to inhibit actin-ring formation and pit formation by osteoclasts cultured on dentine slices. When EP4 was expressed in osteoclasts using an adenovirus carrying EP4 cDNA, both actin-ring and pit-forming activities of osteoclasts were inhibited in an infectious unit-dependent manner. Treatment of EP4-expressing osteoclasts with PGE2 further inhibited their actin-ring and pit-forming activities. Such inhibitory effects of EP4-mediated signals on osteoclast function are similar to those that are calcitonin receptor-mediated. Thus, osteoclast precursors down-regulate their own EP2 and EP4 levels during their differentiation into osteoclasts to escape inhibitory effects of PGE2 on bone resorption.