Prostaglandins of the E series have been shown to be effective inducers of bone formation in vivo. In this study, the effects of PGE2 were evaluated in vivo using subcutaneous administration (3 mg/kg/d for 25 days) to ovariectomized rats or local application in the marrow cavity of tibiae of rats using biodegradable implants (0.13, 1.4 and 32 microg released over 8 days). Systemic treatment of rats with PGE2 stimulated cancellous bone formation in the metaphysis of the proximal tibiae as well as endocortical bone formation and de novo trabecular bone formation in the marrow cavity. Local delivery of PGE2 increased cancellous bone volume in the secondary spongiosa and cortical thickness (at 32 microg). Comparisons of prostanoid effects in vitro, in a bone-derived cell line, showed that PGF2alpha was a better stimulator of DNA synthesis than PGE2. PGF2alpha increased the steady state levels of IGF-I receptor mRNA while PGE2 increased IGF-I expression. Although the mechanism of bone formation by PGE2 is not known at this time, it is clear that PGE2 has powerful local anabolic effects on bone formation in vivo possibly by mediating responses to signals such as changes in mechanical force.