Prostaglandin E2 (PGE2) is a potent lipid mediator of inflammation that modulates immune cell function by binding to unique G protein‐coupled receptors (EP receptors). PGE2 production increases during microbial infection and inflammation. In this study, we assessed the effect of PGE2 on the phagocytosis of bacteria by neutrophils, which are key players during infection and inflammation. We also looked for specific EP receptor signaling pathways that contributed to the neutrophil phagocytic activity. PGE2 (50–1000 ng/ml) inhibited the phagocytosis of Escherichia coli by HL‐60 human neutrophils in a concentration‐dependent manner. Inhibition of neutrophil phagocytosis by PGE2 correlated with increased intracellular cyclic adenosine monophosphate (cAMP) production, and forskolin, an adenosyl cyclase agonist, confirmed the inhibitory effect of cAMP stimulation on neutrophil phagocytosis. The expression of EP2 receptors by HL‐60 cells was confirmed by western blot analysis, and selective agonism of EP2 receptors mimicked the inhibition of phagocytosis by PGE2. The EP2 receptor antagonist AH‐6089 partially blocked the inhibition of neutrophil phagocytosis PGE2. Specific inhibition of phosphatase and tensin homolog (PTEN) enzyme attenuated the inhibition of neutrophil phagocytosis by PGE2, and both PGE2 and increased intracellular cAMP increased neutrophil PTEN activity, which was associated with decreased PTEN phosphorylation. The results support negative regulation of the antimicrobial activity of neutrophils (i.e., phagocytosis), which has important implications for the future management of bacterial infections.