Human osteoarthritis (OA) is characterized by cartilage loss, bone sclerosis, osteophyte formation and inflammation of the synovial membrane. We previously reported that OA osteoblasts (Ob) show abnormal phenotypic characteristics possibly responsible for bone sclerosis and that two subgroups of OA patients can be identified by low or high endogenous production of prostaglandin E2 (PGE2) by OA Ob. Here, we determined that the elevated PGE2 levels in the high OA subgroup were linked with enhanced cyclooxygenase-2 (COX-2) protein levels compared to normal and low OA Ob. A linear relationship was observed between endogenous PGE2 levels and insulin-like growth factor 1 (IGF-1) levels in OA Ob. As parathyroid hormone (PTH) and PGE2 are known stimulators of IGF-1 production in Ob, we next evaluated their effect in OA Ob. Both subgroups increased their IGF-1 production similarly in response to PGE2, while the high OA subgroup showed a blunted response to PTH compared to the low OA group. Conversely, only the high OA group showed a significant inhibition of IGF-1 production when PGE2 synthesis was reduced with Naproxen, a non-steroidal antiinflammatory drug (NSAID) that inhibits cyclooxygenases (COX). The PGE2-dependent stimulation of IGF-1 synthesis was due in part to the cAMP/protein kinase A pathway since both the direct inhibition of this pathway with H-89 and the inhibition of EP2 or EP4 receptors, linked to cAMP production, reduced IGF-1 synthesis. The production of the most abundant IGF-1 binding proteins (IGFBPs) in bone tissue, IGFBP-3, -4, and -5, was lower in OA compared to normal Ob independently of the OA group. Under basal condition, OA Ob expressed similar IGF-1 mRNA to normal Ob; however, PGE2 stimulated IGF-1 mRNA expression more in OA than normal Ob. These data suggest that increased IGF-1 levels correlate with elevated endogenous PGE2 levels in OA Ob and that higher IGF-1 levels in OA Ob could be important for bone sclerosis in OA.