To investigate the prostaglandin E2 (PGE2) biosynthetic mechanism in bladder carcinogenesis, we established Wistar rat model of bladder papilloma and transitional cell carcinoma (TCC) induced by 5% terephthalic acid (TPA) treatment. Then, the mRNA level of cytosolic phospholipase A2 (cPLA2), cyclooxygenases (COX)-1 and -2, membrane-bound PGE2 synthases (mPGES)-1 and -2 was detected using reverse transcription polymerase chain reaction (RT-PCR). Immunoblotting was applied to detect the expression of COX-2 protein. Proliferating cell nuclear antigen (PCNA) was determined by immunohistochemistry. In addition, the level of PGE2 was measured by radioimmunoassay (RIA). Bladder papilloma (100%, 8/8) was examined in rats after 24-week treatment, and bladder TCC (80%, 16/20) was found after 48-week treatment. Histopathological changes were not found in control group rats. The incidence of bladder papilloma and TCC in test group was significantly higher than that in control group (P<0.01). The mRNA levels of cPLA2, COX-2 and mPGES-1 in the bladder papilloma and TCC were significantly higher than those in normal bladder (P<0.01), while the mRNA levels of COX-1 and mPGES-2 in TCC were unchanged compared with normal bladder. Bladder TCC exhibited a substantial expression of COX-2 protein. On the contrary, normal bladder tissue barely expresses COX-2 protein. PCNA labeling index (LI) and the level of PGE2 in bladder papilloma are much higher than those in normal bladder (P<0.01), but lower than those in bladder TCC (P<0.05). In conclusion, increasing PGE2 level via cPLA2--COX-2--mPGES-1 pathway may play an important role in rat bladder carcinogenesis. PGE2 may be a biomarker for the development of bladder TCC. cPLA2 and mPGES-1 may be targets for development of novel chemoprevention strategies for bladder TCC.