The ability of PGE2 to stimulate bone resorption in vitro and in vivo is well established but the effects of this compound on bone formation are still controversial. Recent clinical reports have suggested that long-term infusion of PGE in infants with cyanotic heart diseases led to a stimulation of periosteal bone formation and to hyperostosis. In the present report, we describe the effects of PGE2 (10(-5) M) in bone organ cultures on bone resorption, measured by the release of 45Calcium and the number of osteoclasts in sections of cultured bones, and bone volume, by measuring separately medullary and cortical areas. PGE2 induced a marked increase in 45Ca release and in cortical and medullary osteoclast numbers over 4 days in vitro; despite this increase in bone resorption, cortical bone volume remained constant, indicating a parallel increase in bone resorption and formation at this site. Morphological and quantitative data demonstrated a higher extent of osteoblastic surface along the periosteum of PGE2-treated bones when compared with control cultures. Medullary bone volume, on the other hand, decreased sharply during the culture period, demonstrating a lack of parallel increase in bone formation at this site. It is concluded that, under these experimental conditions, prostaglandin E2 stimulated both resorption and formation along the periosteum and only bone resorption along the endosteum of the cultured bones. The overall effect of PGE2 on bone as a whole, however, was net bone loss.