Prostaglandin E2 (PGE2) has been shown to exert a bone anabolic effect in young and adult rats. In this study we tested whether it possesses a similar effect on bone formation and bone mass in aging rats. Fifteen-month-old rats were injected daily with either PGE2 at 5 mg/kg or vehicle for 14 days. PGE2 treatment stimulated the rate of cancellous bone formation (a ∼5-5-fold increase in bone formation rate), measured by the incorporation of calcein into bone-forming surfaces at the tibial proximal metaphysis. This effect resulted in increased cancellous bone area (+54%) at the same site. Since PGE2 treatment resulted in a much higher proportion of bone surface undergoing bone formation and thus lined with osteoblasts, we tested the hypothesis that PGE2 stimulates osteoblast differentiation from bone marrow precursor cells both in vivo and in vitro. We found that ex vivo cultures of bone marrow stromal cells from rats injected for 2 weeks with PGE2 at 5 mg/kg per day yielded more (∼4-fold) mineralized nodules and exhibited a greater (by 30-40%) alkaline phosphatase activity compared with cultures from vehicle-injected rats, attesting to a stimulation of osteoblastic differentiation by PGE2. We also compared the osteogenic capacity of bone marrow from aging (15-month-old) versus young (5-week-old) rats and its regulation by PGE2 in vitro. Bone marrow stromal cell cultures from aging rats exhibited a greatly diminished osteogenic capacity, reflected in reduced nodule formation (∼6% of young animals) and lower alkaline phosphatase activity (∼60% of young animals). However, these parameters could be stimulated in both groups of animals by incubation with 10-100 nM PGE2. The magnitude of this stimulation was greater in cultures from aging rats (+550% vs +70% in nodule formation of aging compared with young rats). In conclusion, we demonstrate here that PGE2 exerts a bone anabolic effect in aging rats, similar to the effect we and others have reported in young, growing rats. The PGE2-stimulated bone formation, which augments bone mass, most likely results from recruitment of osteoblasts from their bone marrow stromal precursors.