We have documented new observations with respect to PGE2 action in the rabbit CCD. (1) PGE2 can inhibit both cAMP and vasopressin-induced water flow, depending on the sequence of PGE2 addition with respect to vasopressin or cAMP. (2) PGE2 inhibition of vasopressin or cAMP-stimulated water flow can be reversed with staurosporine. Thus, PGE2 inhibits vasopressin-stimulated water flow by activation of PKC and (3) PGE2 induces release of calcium from intracellular stores. These results strongly suggest the presence of a PGE2 receptor coupled to PIP2 hydrolysis. PGE2 mediated increases in cytosolic calcium are responsible for the inhibitory action of PGE2 on sodium transport. While stimulation of cAMP production by PGE2 may contribute to the inhibition of sodium transport, it is not required since in the presence of 8-CPTcAMP, PGE2 still decreases sodium transport. The effect of PGE2 on sodium transport is pertussis toxin insensitive and is unlikely to be mediated by an inhibitory G protein. Using PGE2 and one of its selective analogues, sulprostone, we have provided evidence for functionally distinct PGE2 receptors. Separate PGE2 receptor subtypes appear to be coupled to separate transport processes. These receptor subtypes may correspond to the EP1, EP2 and EP3 receptors described earlier in smooth muscle. Thus, an EP2 like receptor stimulates cAMP generation and water reabsorption while an EP1 like receptor increases [Ca++]i and inhibits sodium reabsorption. Finally, an EP3 receptor, equivalently activated by sulprostone and PGE2, may couple to Gi and mediate pertussis toxin sensitive inhibition of vasopressin-stimulated water flow.