To minimize complicating interactions inherent in heterogeneous cell populations, we used a panel of cloned murine autoreactive (E8.A1) and antigen-specific (HEL.C10, HEL.B14) T cell hybridomas to examine the effect of prostaglandin E2 (PGE2) on T cell activation. These T cells secrete interleukin 2 (IL 2) when co-cultured with a cloned population of I region-matched stimulator cells (TA3), or with mitogenic signals in the absence of TA3 stimulator cells. Physiologic concentrations of PGE2 inhibited the induction of IL 2 secretion by the T cell hybridomas tested, when they were activated either by TA3 cells or by mitogenic signals. IL 2 production was inhibited in a dose-dependent manner by concentrations of PGE2 between 10(-7) and 10(-11) M, with 50% inhibition occurring at 10(-10) M. Pretreatment of the T hybridoma cells with 10(-7) M PGE2 for 1 hr before culture also resulted in marked inhibition of IL 2 secretion. Similar pretreatment of the TA3 cells did not affect their ability to activate the T cell hybridomas. PGE2 at 10(-8) M induced a 30-fold increase in cAMP levels within 25 min of addition to culture of the E8.A1 T cell hybridoma, but caused no significant elevation of cAMP levels in TA3 cells. The direct addition of dibutyryl cAMP (dcAMP) to cultures of E8.A1 cells resulted in marked inhibition of IL 2 secretion when stimulated by TA3 or by mitogenic signals, with an average of 80% inhibition occurring at 10(-4) M dcAMP. PGE2 and dcAMP also inhibited the growth of E8.A1 cells. Initially, cell growth was virtually halted, but began to recover between 24 and 48 hr after the addition of either PGE2 or dcAMP. Neither PGE2 nor dcAMP inhibited the division of TA3 cells. High affinity binding sites for PGE2 were detected in the E8.A1 T cell hybridomas with an apparent Kd of 7.6 X 10(-10) M, which is consistent with the functional data. No specific binding was detected in the TA3 stimulator cells. These findings suggest that the immunosuppressive effects of PGE2 are localized to the T cell, are receptor regulated, and may be mediated by the associated increase of cAMP levels in the T cell hybridomas.