Overexpression of human cyclooxygenase 2 (COX-2) in the mammary glands of transgenic mice induces tissue-specific tumorigenic transformation. However, the molecular mechanisms involved are not yet defined. Here we show that COX-2 expressed in the epithelial cell compartment regulates angiogenesis in the stromal tissues of the mammary gland. Microvessel density increased before visible tumor growth and exponentially during tumor progression. Inhibition of prostanoid synthesis with indomethacin strongly decreased microvessel density and inhibited tumor progression. Up-regulation of angiogenic regulatory genes in COX-2 transgenic mammary tissue was also potently inhibited by indomethacin treatment, suggesting that prostanoids released from COX-2-expressing mammary epithelial cells induce angiogenesis. G protein-coupled receptors for the major product, prostaglandin E₂ (PGE₂) EP_1-4, are expressed during mammary gland development, and EP_1,2,4 receptors were up-regulated in tumor tissue. PGE₂ stimulated the expression angiogenic regulatory genes in mammary tumor cells isolated from COX-2 transgenic mice. Such cells are tumorigenic in nude mice; however, treatment with Celecoxib, a COX-2-specific inhibitor, reduced tumor growth and microvessel density. These results define COX-2-derived PGE₂ as a potent inducer of angiogenic switch during mammary cancer progression.