Mesenchymal stem cells (MSCs) possess unique immunomodulatory abilities. Many studies have elucidated the clinical efficacy and underlying mechanisms of MSCs in immune disorders. Although immunoregulatory factors, such as Prostaglandin E2 (PGE2), and their mechanisms of action on immune cells have been revealed, their effects on MSCs and regulation of their production by the culture environment are less clear. Therefore, we investigated the autocrine effect of PGE2 on human adult stem cells from cord blood or adipose tissue, and the regulation of its production by cell-to-cell contact, followed by the determination of its immunomodulatory properties. MSCs were treated with specific inhibitors to suppress PGE2 secretion, and proliferation was assessed. PGE2 exerted an autocrine regulatory function in MSCs by triggering E-Prostanoid (EP) 2 receptor. Inhibiting PGE2 production led to growth arrest, whereas addition of MSC-derived PGE2 restored proliferation. The level of PGE2 production from an equivalent number of MSCs was down-regulated via gap junctional intercellular communication. This cell contact-mediated decrease in PGE2 secretion down-regulated the suppressive effect of MSCs on immune cells. In conclusion, PGE2 produced by MSCs contributes to maintenance of self-renewal capacity through EP2 in an autocrine manner, and PGE2 secretion is down-regulated by cell-to-cell contact, attenuating its immunomodulatory potency.