CD44 is a receptor for hyaluronic acid and is found on the surface of hematopoetic cells and in mesenchymal tissue. It is also expressed on endothelial cells (EC). Cyclooxygenase (COX) is the rate-limiting enzyme in the production of prostaglandins in EC. Here we show that engagement of CD44 with signaling monoclonal antibodies (mAbs) or its natural ligand hyaluronic acid induces COX-2 and prostacyclin (PGI2) formation in human EC. This induction was blocked by mAbs that have been shown to inhibit CD44-mediated intracellular signaling. COX-1 induction was not observed after CD44 ligation. CD44-stimulated COX-2 activation/PGI2 production was accompanied by the production of the potent endothelial mitogen, vascular endothelial growth factor (VEGF) and was inhibited by a neutralizing VEGF antibody. Moreover, this COX-2 induction was also associated with an increase in EC proliferation that was inhibited by the blocking anti-CD44 mAbs and a COX-2-specific inhibitor. This is the first study to show that engagement of CD44 with mAbs or its natural ligand induces COX-2, generates VEGF, and thus leads to an increase in EC proliferation. Results from this study may have important and widespread implications for the development of novel therapeutic agents for modulating blood vessel growth during ischemic heart disease, during inflammation, or around solid tumors.