The cells of the renal medulla produce large amounts of prostaglandin E2 (PGE2) via cyclooxygenases (COX)-1 and -2. PGE2 is well known to play a critical role in salt and water balance and maintenance of medullary blood flow. Since renal medullary PGE2 production increases in antidiuresis, and since COX inhibition is associated with damage to the renal medulla during water deprivation, PGE2 may promote the adaptation of renal papillary cells to high interstitial solute concentrations. To address this question, MDCK cells were exposed to a gradual tonicity increase in the presence or absence of 20 µM PGE2 prior to analysis of (i) cell survival, (ii) expression of osmoprotective genes (AR, BGT1, SMIT, HSP70 and COX-2), (iii) subcellular TonEBP/NFAT5 abundance, (iv) TonEBP/NFAT5 transcriptional activity and (v) aldose reductase promoter activity. Cell survival and apoptotic indices after raising the medium tonicity improved markedly in the presence of PGE2. PGE2 significantly increased tonicity-mediated upregulation of AR, SMIT and HSP70 mRNAs. However, neither nuclear abundance nor TonEBP/NFAT5-driven reporter activity were elevated by PGE2, but aldose reductase promoter activity was significantly increased by PGE2. Interestingly, tonicity-induced COX-2 expression and activity was also stimulated by PGE2, suggesting the existence of a positive feedback loop. These results demonstrate that the major medullary prostanoid, PGE2, stimulates the expression of osmoprotective genes and favours the adaptation of medullary cells to increasing interstitial tonicities, an effect that is not explained directly by the presence of TonEs in the promoter region of the respective target genes. These findings may be relevant in the pathophysiology of medullary damage associated with analgesic drugs.