Prostaglandins (PGs), bioactive lipid molecules produced by cyclooxygenase enzymes (COX-1 and COX-2), have diverse biological activities, including growth-promoting actions on gastrointestinal mucosa. They are also implicated in the growth of colonic polyps and cancers. However, the precise mechanisms of these trophic actions of PGs remain unclear. As activation of the epidermal growth factor receptor (EGFR) triggers mitogenic signaling in gastrointestinal mucosa, and its expression is also upregulated in colonic cancers and most neoplasms, we investigated whether PGs transactivate EGFR. Here we provide evidence that prostaglandin E2 (PGE2) rapidly phosphorylates EGFR and triggers the extracellular signal-regulated kinase 2 (ERK2)--mitogenic signaling pathway in normal gastric epithelial (RGM1) and colon cancer (Caco-2, LoVo and HT-29) cell lines. Inactivation of EGFR kinase with selective inhibitors significantly reduces PGE2-induced ERK2 activation, c-fos mRNA expression and cell proliferation. Inhibition of matrix metalloproteinases (MMPs), transforming growth factor-alpha (TGF-alpha) or c-Src blocked PGE2-mediated EGFR transactivation and downstream signaling indicating that PGE2-induced EGFR transactivation involves signaling transduced via TGF-alpha, an EGFR ligand, likely released by c-Src-activated MMP(s). Our findings that PGE2 transactivates EGFR reveal a previously unknown mechanism by which PGE2 mediates trophic actions resulting in gastric and intestinal hypertrophy as well as growth of colonic polyps and cancers.