Prostaglandins (PG) are released during tissue injury and inflammation, and inhibit immune responses at many points. PG may be one of several factors that protect not only against injury-induced, but also spontaneous, organ-specific autoimmune disease. Here we show that the production of PGE₂, normally produced at a very low rate in islets of Langerhans, is significantly increased in inflamed islets of non-obese diabetic (NOD) mice. We investigated a possible role of PGE₂ in controlling TCR-dependent release of IFN-γ from islet-reactive NOD CD8⁺ T cells. PGE₂ inhibited anti-TCR antibody-triggered release of IFN-γ from CD8⁺ T cell clone 8D8 and from polyclonal cytotoxic T lymphocytes (CTL). Using receptor subtype selective agonists, we present evidence that the effect of PGE₂ is mediated by EP₂ and EP₄ receptors, both of which are coupled to an increase in intracellular cAMP production. The cAMP analogs 8-Br-cAMP and Sp-cAMPS mimic the effect of EP₂/EP₄ receptor agonists, inhibiting TCR-triggered IFN-γ release from NOD CD8⁺ T cells in a dose-dependent manner. The inhibitory effect of PGE₂ was largely reversed by IL-2 added at the time of culture initiation and decreased with increasing strength of stimulation through the TCR. Resting CTL were more sensitive to PGE₂ than recently expanded CTL and NOD CD8⁺ T cells remained insensitive to PGE₂ for a longer time than BALB/c cells. Our study suggests that PGE₂ may be part of a regulatory network that controls local activation of T cells and may play a role in the balance between the development of islet autoimmunity or maintenance of tolerance.