Prostaglandin E2 is a potent lipid mediator of inflammation that effects changes in cell functions through ligation of four distinct G protein-coupled receptors (E-prostanoid (EP)1, EP2, EP3, and EP4). During pneumonia, PGE2 production is enhanced. In the present study, we sought to assess the effect of endogenously produced and exogenously added PGE2 on FcRγ-mediated phagocytosis of bacterial pathogens by alveolar macrophages (AMs), which are critical participants in lung innate immunity. We also sought to characterize the EP receptor signaling pathways responsible for these effects. PGE2 (1–1000 nM) dose-dependently suppressed the phagocytosis by rat AMs of IgG-opsonized erythrocytes, immune serum-opsonized Klebsiella pneumoniae, and IgG-opsonized Escherichia coli. Conversely, phagocytosis was stimulated by pretreatment with the cyclooxygenase inhibitor indomethacin. PGE2 suppression of phagocytosis was associated with enhanced intracellular cAMP production. Experiments using both forskolin (adenylate cyclase activator) and rolipram (phosphodiesterase IV inhibitor) confirmed the inhibitory effect of cAMP stimulation. Immunoblot analysis of rat AMs identified expression of only EP2 and EP3 receptors. The selective EP2 agonist butaprost, but neither the EP1/EP3 agonist sulprostone nor the EP4-selective agonist ONO-AE1-329, mimicked the effects of PGE2 on phagocytosis and cAMP stimulation. Additionally, the EP2 antagonist AH-6809 abrogated the inhibitory effects of both PGE2 and butaprost. We confirmed the specificity of our results by showing that AMs from EP2-deficient mice were resistant to the inhibitory effects of PGE2. Our data support a negative regulatory role for PGE2 on the antimicrobial activity of AMs, which has important implications for future efforts to prevent and treat bacterial pneumonia.