Levels of prostaglandin E₂ (PGE₂), a potent inhibitor of fibroblast function, are decreased in the lungs of patients with pulmonary fibrosis, which has been shown to be because of limited expression of cyclooxygenase-2 (COX-2). To further investigate the relative importance of COX-2 and PGE₂ in the development of fibrosis we have used a selective COX-2 inhibitor and COX-2-deficient (^−/− and ^+/−) mice in studies of bleomycin-induced lung fibrosis. We demonstrate in wild-type mice that bleomycin-induced lung PGE₂ production is predominantly COX-2 mediated. Furthermore, COX-2^+/− mice show limited induction of PGE₂ and an enhanced fibrotic response with increased lung collagen content compared with wild-type mice after bleomycin injury (P < 0.001). In contrast, COX-2^−/− mice show increased levels of lung PGE₂, compared with wild-type mice after injury (P < 0.05), because of compensatory up-regulation of COX-1, which appears to be associated with macrophage/monocytes but not fibroblasts derived from these mice. COX-2^−/− mice show an enhanced and persistent inflammatory response to bleomycin, however the fibrotic response to injury was unaltered compared with wild-type animals. These data provide further direct evidence for the importance of up-regulating COX-2 and PGE₂ expression in protecting against the development of fibrosis after lung injury.