A number of immunomodulatory molecules are present in the placenta, including cytokines, prostaglandins, progesterone and indoleamine 2,3-dioxygenase. An undefined factor capable of down-regulating T-cell activity has recently been reported [1] as being produced by short-term cultures of placental fragments. By careful repetition of these studies we have confirmed that chorionic villi isolated from term placenta produce a low molecular weight, heat stable factor capable of inhibiting the IL-2-dependent proliferation of mouse CTLL-2 cells. This activity was not due, however, to a previously unknown immunosuppressive molecule, but rather to prostaglandin E2 (PGE2). Expression of cyclooxygenase (COX)-2 was detected in the syncytiotrophoblast of chorionic villi explants using immunohistochemistry. Culture of the explants in the presence of the COX-1/COX--2 inhibitors indomethacin and diclofenac, or with the COX-2-selective inhibitor DFP, blocked the production of the immunosuppressive factor. The immunosuppressive activity was restored by adding PGE2 to the supernatants obtained from diclofenac-inhibited explants. A number of different receptors are involved in mediating the biological effects of prostaglandins. By utilizing selective antagonists of individual receptors, we have established that the immunosuppressive effect of PGE2 on CTLL-2 cells is exerted via the EP4 receptor. Thus, addition of an EP4-selective antagonist, but not of EP1 or EP3 antagonists, abolished the immunosuppressive effect of PGE2 on CTLL-2 cells. This may have implications for attempts to selectively manipulate T-cell responses.