The effect of prostaglandin E2 (PGE2) on osteoclast (OC) differentiation is unclear, either stimulator or inhibitor, depending on the in vitro system used. This probably reflects indirect mechanisms through intermediate cells. We have investigated the direct effect of PGE2 on human OC differentiation from cord blood monocytes (CBMs) in the absence of stromal cells. Macrophages and multinucleated cells (MNCs) resembling OCs form in cultures of CBMs stimulated by 1,25-dihydroxyvitamin D3. In the present study, CBMs were cultured for 3 weeks, as previously described, in the presence or absence of PGE2. The number of MNCs was significantly reduced in the presence of PGE2 as was the proliferation of cultured CBMs, assessed on day 7. Immunohistochemistry was performed to evaluate macrophage markers (CD11b and CD14) and OC marker (beta3-chain). PGE2 significantly increased the numbers of CD11b-positive and CD14-positive cells, whereas the number of beta3-chain-positive cells was significantly decreased. beta3-Chain, c-fos, and human calcitonin receptor (h-CTR) messenger RNA (mRNA) expressions were evaluated by reverse transcription-PCR with RNA extracted from cultured CBMs. In the presence of PGE2, expression of beta3-chain and c-fos mRNA was reduced from the first week of culture. h-CTR mRNA expression was also reduced, and only the h-CTR1 isoform was detected in the presence of PGE2. In addition, when PGE2 was added only during the last week of culture, when no CBM proliferation occurred, the number of CD11b- and beta3-positive cells was unchanged compared to that in the control culture, as were the proportion of MNCs, the fusion index, and the expression of c-fos mRNA. In conclusion, our results suggest that PGE2 has an inhibitory effect on human OC differentiation from CBMs, possibly by reducing precursor proliferation in these cultures. We also hypothesize that PGE2 may reduce OC differentiation by increasing the proportion of precursor cells that differentiate into macrophages. In addition, this may be the result of inhibition of the c-fos expression in CBMs.