Microglial activation has been implicated in many astrogliosis-related pathological conditions including astroglioma; however, the detailed mechanism is not clear. In this study, we used primary enriched microglia and astrocytes cultures to determine the role of microglial prostaglandin E2 (PGE2) in the proliferation of astrocytes. The proliferation of astrocytes was measured by BrdU incorporation. The level of PGE2 was measured by ELISA method. Pharmacological inhibition or genetic ablation of COX-2 in microglia were also applied in this study. We found that proliferation of astrocytes increased following lipopolysaccharide (LPS) treatment in the presence of microglia. Furthermore, increased proliferation of astrocytes was observed in the presence of conditioned media from LPS-treated microglia. The potential involvement of microglial PGE2 in enhanced astrocyte proliferation was suggested by the findings that PGE2 production and COX-2 expression in microglia were increased by LPS treatment. In addition, activated microglia-induced increases in astrocyte proliferation were blocked by the PGE2 antagonist AH6809, COX-2 selective inhibitor DuP-697 or by genetic knockout of microglial COX-2. These findings were further supported by the finding that addition of PGE2 to the media significantly induced astrocyte proliferation. These results indicate that microglial PGE2 plays an important role in astrocyte proliferation, identifying PGE2 as a key neuroinflammatory molecule that triggers the pathological response related to uncontrollable astrocyte proliferation. These findings are important in elucidating the role of activated microglia and PGE2 in astrocyte proliferation and in suggesting a potential avenue in the use of anti-inflammatory agents for the therapy of astroglioma.