COX-2 derived PGE₂ is critical for the integrity and function of renal medullary cells during antidiuresis. The present study extended our previous finding that tonicity-induced COX-2 expression is further stimulated by the major COX-2 product, PGE₂, and investigated the underlying signaling pathways and the functional relevance of this phenomenon. Hyperosmolality stimulated COX-2 expression and activity in MDCK cells, a response that was further increased by PGE₂-cAMP signaling, suggesting the existence of a positive feedback loop. This effect was diminished by AH6809, an EP2 antagonist, and by the PKA-Inhibitor H-89, but not by AH23848, an EP4 antagonist. The effect of PGE₂ was mimicked by forskolin and dibutyryl-cAMP, suggesting that the stimulatory effect of PGE₂ on COX-2 is mediated by a cAMP-PKA-dependent mechanism. Accordingly, cAMP-responsive element (CRE)-driven reporter activity paralleled the effects of PGE₂, AH6809, AH23848, H-89, forskolin, and dibutyryl-cAMP on COX-2 expression. In addition, the stimulatory effect of PGE₂ on tonicity-induced COX-2 expression was blunted in cells transfected with dominant-negative CRE binding (CREB) protein, as was the case in a COX-2 promoter reporter construct in which a putative CRE was deleted. Furthermore, PGE₂ resulted in PKA-dependent phosphorylation of the pro-apoptotic protein Bad at Ser155, a mechanism that is known to inactivate Bad, which coincided with reduced caspase-3 activity during osmotic stress. Conversely, pharmacological interruption of the PGE₂-EP2-cAMP-PKA pathway abolished Ser155 phosphorylation of Bad and blunted the protective effect of PGE₂ on cell survival during osmotic stress. These observations indicate the existence of a positive feedback loop of PGE₂ on COX-2 expression during osmotic stress, an effect that apparently is mediated by EP2-cAMP-PKA signaling, and which contributes to cell survival under hypertonic conditions.