Epidermal melanocytes proliferate following a variety of physical stimuli, for example, mechanical injury to the skin or exposure to UV radiation. We suggest that some transducer in the epidermis converts the physical modality into a biochemical signal which is responsible for initiation of mitosis. Melanocyte stimulating hormone, both alpha and beta variants, administered parenterally for periods up to 4 weeks do not alter the number of melanocytes per mm2 in several strains of neonatal or adult mice. Ultraviolet B and arachidonic acid both stimulate proliferation of pigment cells. Indomethacin which inhibits cyclooxygenase and the formation of prostaglandins (PGs) blocks the proliferation induced by both agents. We tested a wide variety of PGs. We observed that PGD2 applied daily to the skin of a mouse causes a small increase in melanocyte density (cells/mm2). PGE2 in similar doses applied topically caused a large increase. PGE2 caused an increase in the uptake of tritiated thymidine by dopa-positive dendritic cells. This indicates that PGE2 stimulated some melanocytes to proliferate. Histologic studies indicate that PGE2 also enhances melanogenesis. PGE2 is synthesized in the skin and affects keratinocytes and Langerhans cells as well as pigment cells. We postulate that it is one compound that can modulate the interaction of these 3 main cells of the epidermis.