Cyclooxygenase (COX) has two isoforms, COX-1 and -2, which catalyze the key step in the conversion of cellular arachidonic acid into prostaglandins. In recent years, interest in COX-2 has significantly increased since it has been a target for the development of specific non-steroidal anti-inflammatory drugs. We report that COX-2 expression is up-regulated in phorbol ester (phorbol myristate acetate, PMA)-differentiated human U937 macrophage-like cells stimulated with lipopolysaccharide (LPS), whereas COX-1 is not up-regulated. We show that the LPS-induced up-regulation of COX-2 depends on the activity of the Mg ؉2 -dependent phosphatidic acid phosphohydrolase 1 (PAP-1). Inhibition of PAP-1 by bromoenol lactone, propranolol, or ethanol resulted in a decrease in LPS-induced COX-2 mRNA transcript production, COX-2 protein expression, and prostaglandin E 2 release from U937 macrophages. To ensure that these results did not arise because of PMA treatment of the U937 cells, similar experiments were conducted with the P388D 1 cell line, which does not require PMA differentiation. LPS increased the levels of endogenous cellular diacylglycerol (DAG) within 2 min of stimulation. This increase was observed to be sensitive to the PAP-1 inhibitors. Furthermore, phosphatidic acid phosphohydrolase activity assays showed that the bromoenol lactone-sensitive PAP-1 activity was translocated from the cytosolic fraction to the membrane fraction within 2 min of LPS exposure. Finally, DAG add-back experiments demonstrate that LPS-induced COX-2 expression is enhanced by the addition of exogenous DAG.