Vascular endothelial growth factor (VEGF) is an essential angiogenic signaling element that acts through its two tyrosine kinase receptors, inducing both proliferation of endothelial cells and vascular permeability. Given the importance of vasculogenesis and angiogenesis to early pregnancy, it is of interest to understand the mechanisms regulating vascular development at this stage. We previously demonstrated that VEGF and receptors are up-regulated during embryo implantation in an unique animal model, the mink, a species displaying obligate embryonic diapause. Herein we examined the role of prostaglandin E2 (PGE(2)) as a regulator of VEGF during early pregnancy and established the mechanisms of this regulation. We demonstrate that activated embryos secrete PGE(2) and that expression of PGE synthase protein in the uterus is dependent upon direct contact with invading trophoblast cells during implantation. Using mink uterine stromal cells transfected with mink VEGF promoter driving the luciferase reporter gene, we show that PGE(2) induces promoter transactivation and that this response can be eliminated by blockade of protein kinase A. Treatment with antagonists to PGE(2) receptors EP2 and EP4 eliminated the PGE(2)-induced response in transfected cells. Deletional studies of the promoter revealed that a region of 99 bp upstream of the transcription start site is required for PGE(2)-induced transactivation. Mutation of an AP2/Sp1 cluster, found within the 99 bp, completely eliminated the PGE(2) response. Furthermore, chromatin immunoprecipitation assays confirmed binding of the AP2 and Sp1 transcription factors to the endogenous mink VEGF promoter in uterine cells. PGE(2) stimulated acetylation of histone H3 associated with the promoter region containing the AP2/Sp1 cluster. Taken together, these results demonstrate that PGE(2) plays an important role in regulating uterine and thus placental vascular development, acting through its receptors EP2 and EP4, provoking protein kinase A activation of AP2 and Sp1 as well as acetylation of histone H3 to transactivate the VEGF promoter.