Concomitant use of hydrocortisone and the nonspecific cyclo-oxygenase (COX)-inhibitor indomethacin increases the risk for intestinal perforations in preterm infants. We determined whether this was associated with insufficient epidermal growth factor receptor (EGF-R) signaling. We tested the effect of EGF, hydrocortisone, and indomethacin on its activation, cell proliferation and migration, COX-2 expression, and prostaglandin E2 (PGE2) production. Human small intestine epithelial cell line FHsInt74 and EGF-R-deficient mice [EGF-R (-/-)] were used as models. The data revealed that EGF-R signaling had a bimodal positive effect on fetal enterocyte: 1) it increased cell proliferation and migration synergistically with hydrocortisone and 2) up-regulated COX-2 mRNA expression and subsequent PGE2 production. Correlating with this, COX-2 protein expression was down-regulated in EGF-R (-/-) intestine. Despite a positive effect on cell proliferation with EGF, hydrocortisone blunted the stimulatory effect of EGF on COX-2 expression and PGE2 production. Addition of indomethacin even further inhibited the EGF-stimulated PGE2 synthesis. The data suggest that concomitant use of indomethacin and hydrocortisone on preterm infants, who physiologically synthesize only low levels of EGF-R ligands, may lead to intestinal problems related to failure in cytoprotective and regenerative events.