Insulin-like growth factor I (IGF-I) is a widely expressed abundant autocrine and paracrine factor that regulates the proliferation and differentiation of a variety of cell types. Prostaglandin E2 (PGE2) is a potent stimulator of IGF-I synthesis in bone. We examined the regulation of IGF-I synthesis by PGE2 in osteoblast-enriched (Ob) cells from fetal rat calvaria. PGE2 treatment of Ob cells at 1 microM for 2 h resulted in a 5-fold increase in heterogeneous nuclear RNA levels, as measured by a reverse transcriptase-polymerase chain reaction assay, suggesting an increase in IGF-I gene transcription. RNase protection analysis was used to map the transcriptional start sites in the IGF-I gene that are used in Ob cells. Consistent with other extrahepatic tissues, initiation of transcription occurs primarily at three sites within the 5′-regions of exon 1 of the IGF-I gene. PGE2 treatment did not alter start site usage. The regions upstream of these transcriptional start sites were analyzed by transiently transfecting Ob cells with putative rat IGF-I promoter sequences ligated to a luciferase reporter gene. Constructs containing 1.4 kilobases of the 5′-regions regions of exons 1 and 2 had significant promoter activity. PGE2 treatment of transfected Ob cells increased luciferase activity 5-fold when a 1.4-kilobase exon 1 promoter fragment was tested. This increase in luciferase activity was time and dose dependent. Smaller regions of the exon 1 promoter sequence gave higher basal activity and were less responsive to PGE2. We conclude that regions involved in IGF-I regulation by PGE2 are contained within the IGF-I promoter.