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Human mesenchymal stem cells (MSCs) are known for their prostaglandin E2 (PGE2)-mediated immunosuppressive function but the precise molecular mechanisms underlying PGE2 biosynthesis during inflammation have not been completely elucidated. In this study, we have investigated the involvement of PGE2 pathway members in PGE2 production by bone marrow (BM)-MSCs in response to inflammatory stimuli, and their role in immunosuppression mediated by BM-MSCs. We found that IFN-γ and TNF-α increased cyclooxygenase (COX)-2 expression but not that of prostaglandin E synthase (PGES), or PGE2 production. On the other hand, the toll like receptor 3 (TLR3) stimulant poly(I:C) increased expression of both COX-2 and PGES, resulting in a significant increase in PGE2 levels. This effect was reversed upon COX-2 inhibition with indomethacin or PGES downregulation by siRNA. Reduced PGE2 levels decreased MSC’s capacity to inhibit hPBMC proliferation. In addition, administration of MSCs with inhibited PGES expression into mice with graft-versus-host disease (GVHD) did not reduce mortality. In summary, the present study reveals that upregulation of PGES via TLR3 is critical for BM-MSCs-mediated immunosuppression by PGE2 secretion via the COX-2/PGE2 pathway. These results provide a basis for understanding the molecular mechanisms underlying the PGE2-mediated immunosuppressive properties of MSCs. [ABSTRACT FROM AUTHOR]