Prostaglandin E2 (PGE2), a bioactive lipid mediator, is one of the most important locally acting factors involved in a variety of physiological and pathophysiological processes. PGE2 binds with four EP receptors (EP1-4) to activate G protein-coupled receptor signaling responses. Recent functional and molecular studies have revealed that PGE2 plays an essential role in regulation of renal fluid transport via a variety of mechanisms. The water balance mainly depends on the regulation of aquaporin-2 (AQP2) by arginine vasopressin (AVP) in renal collecting duct principal cells. In recent years, increasing evidence suggests that PGE2 plays an important role in renal water reabsorption in the collecting ducts. In this paper, we reviewed the role of PGE2 and its receptors in the regulation of water reabsorption in the kidney, which may provide a new therapeutic strategy for many diseases especially nephrogenic diabetes insipidus.