The molecular mechanisms that enable cyclooxygenase-2 (COX-2) and its mediator prostaglandin E2 (PGE2) to inhibit transforming growth factor-beta (TGF-beta) signaling during mammary tumorigenesis remain unknown. We show here that TGF-beta selectively stimulated the expression of the PGE2 receptor EP2, which increased normal and malignant mammary epithelial cell (MEC) invasion, anchorage-independent growth, and resistance to TGF-beta-induced cytostasis. Mechanistically, elevated EP2 expression in normal MECs inhibited the coupling of TGF-beta to Smad2/3 activation and plasminogen activator inhibitor-1 (PAI1) expression, while EP2 deficiency in these same MECs augmented Smad2/3 activation and PAI expression stimulated by TGF-beta. Along these lines, engineering malignant MECs to lack EP2 expression prevented their growth in soft agar, restored their cytostatic response to TGF-beta, decreased their invasiveness in response to TGF-beta, and potentiated their activation of Smad2/3 and expression of PAI stimulated by TGF-beta. More important, we show that COX-2 or EP2 deficiency both significantly decreased the growth, angiogenesis, and pulmonary metastasis of mammary tumors produced in mice. Collectively, this investigation establishes EP2 as a potent mediator of the anti-TGF-beta activities elicited by COX-2/PGE2 in normal and malignant MECs. Our findings also suggest that pharmacological targeting of EP2 receptors may provide new inroads to antagonize the oncogenic activities of TGF-beta during mammary tumorigenesis.-Tian, M., Schiemann, W. P. PGE2 receptor EP2 mediates the antagonistic effect of COX-2 on TGF-beta signaling during mammary tumorigenesis.