Abstract MHC class II molecules expressed in lymphoid and nonlymphoid cells act as signal-transducer molecules. We demonstrate that engagement of MHC class II molecules on human IFN-gamma-treated fibroblast-like synoviocytes by their natural ligand, the staphylococcal enterotoxin A (SEA), selectively induces the production of interstitial collagenase over the expression of the tissue inhibitor of metalloproteinase (TIMP). Collagenase gene expression required de novo protein synthesis and was accompanied by high levels of PGE2 production, suggesting its implication in this response. Two inhibitors that affect prostaglandin biosynthesis, indomethacin and arachidonyl-trifluoromethyl-ketone, inhibited both PGE2 production and collagenase gene expression. The addition of exogenous PGE2 to inhibitor-treated cells partially restored the SEA-induced collagenase, indicating a role for PGE2 in this response. As cyclooxygenases (COX-1 and -2), cytosolic phospholipase A2 (cPLA2), and secreted PLA2 (sPLA2) are the enzymes potentially implicated in prostaglandin synthesis, their involvement in SEA-induced collagenase was investigated. The mRNA levels of COX-2 and cPLA2 rapidly increased following ligation of MHC class II molecules, while COX-1 and sPLA2 mRNA levels were unchanged and transiently depressed, respectively. SEA-induced COX-2 mRNA was translated adequately to protein, whereas cPLA2 protein level was not enhanced, but rapidly phosphorylated, a process previously linked to the enzyme activation. In conclusion, this work demonstrates a selective induction of collagenase gene expression over its natural inhibitor TIMP in human IFN-gamma-treated fibroblast-like synoviocytes mediated, at least in part, by PGE2, and provides evidence that signaling via MHC class II molecules induces the production of PGE2 through enhanced production of COX-2 and possibly activation of the cPLA2.