Ultraviolet B radiation (UVB) is a pro-oxidative stressor with profound effects on skin in part through its ability to stimulate cytokine production. Peroxisome proliferator-activated receptor ␥ (PPAR␥) has been shown to regulate inflammatory processes and cytokine release in various cell types. Since the oxidized glycerophospholipid 1-hexadecyl-2-azelaoyl glycerophosphocholine (azPC) has been shown to be a potent PPAR␥ agonist, this study was designed to assess whether the PPAR␥ system is a target for UVB irradiation and involved in UVB-induced inflammation in epidermal cells. The present studies demonstrated the presence of PPAR␥ mRNA and functional protein in human keratinocytes and epithelial cell lines HaCaT, KB, and A431. The treatment of epidermal cells with the PPAR␥-specific agonist ciglitazone or azPC augmented cyclooxygenase-2 expression and enzyme activity induced by phorbol 12-myristate-13-acetate or interleukin-1␤. Lipid extracts from the cell homogenate of UVB-irradiated, but not control, cells contained a PPAR␥-agonistic activity identified by reporter assay, and this activity up-regulated cyclooxygenase-2 expression induced by phorbol 12-myristate-13-acetate. Subjecting purified 1-hexadecyl-2-arachidonoyl-glycerophosphocholine to UVB irradiation generated a PPAR␥-agonistic activity, among which the specific PPAR␥ agonist azPC was identified by mass spectrometry. These findings suggested that UVB-generated PPAR␥-agonistic activity was due to the free radical mediated nonenzymatic cleavage of endogenous glycerophosphocholines. Treatment with the specific PPAR␥ antagonist GW9662 or expression of a dominant-negative PPAR␥ mutant in KB cells inhibited UVB-induced epidermal cell prostaglandin E 2 production. These findings suggested that UVB-generated PPAR␥ activity is necessary for the optimal production of epidermal prostaglandins. These studies demonstrated that epithelial cells contain a functional PPAR␥ system, and this system is a target for UVB through the production of novel oxidatively modified endogenous phospholipids.