Oncostatin-M (OSM), a pluripotent cytokine of the interleukin-6 (IL-6) family, is produced in a number of inflammatory conditions. Known sources of OSM include monocytes-macrophages and T-cells. Here we present microglia, the resident macrophages of the brain, as a source of OSM in the CNS. In this context, we describe a novel inducer of OSM, prostaglandin E2 (PGE2). PGE2 induces OSM expression in microglia, monocytes, and macrophages of human and murine origin. PGE2 induction of OSM is mimicked by cholera toxin, an activator of stimulatory G (Gs)-proteins; by forskolin, an activator of adenylate cyclase; and by the cAMP analog, dibutyryl-cAMP. PGE2 induction of OSM gene expression is inhibited by the adenylate cyclase inhibitor 2′,5′-dideoxyadenosine, by the protein kinase A (PKA) inhibitor H-89, and by a dominant-negative PKA construct. These data indicate that PGE2 signals via Gs-protein-coupled receptor(s), adenylate cyclase, and PKA to induce OSM expression. Accordingly, other activators of cAMP signaling such as norepinephrine and PGE1 induce OSM. The ability of PGE2 to induce OSM expression was tested under more physiological conditions, using cocultures of astrocytes and monocytes. Treatment of the cocultures with IL-1β or tumor necrosis factor-α (TNF-α) results in production of PGE2 and OSM. PGE2 produced in the cocultures is responsible for OSM induction, because pretreatment with indomethacin, an inhibitor of prostaglandin synthesis, as well as depletion of PGE2, abrogate OSM expression induced by IL-1β or TNF-α. These data suggest that in the CNS, OSM may be produced through collaboration of astrocytes and macrophages-microglia.