Chondrocyte dedifferentiation has been noted in osteoarthritic cartilage, but the contribution of this phenomenon is poorly understood. Interleukin (IL)-1β, the major pro-inflammatory cytokine found in osteoarthritic synovial fluid, induces the dedifferentiation of cultured articular chondrocytes, whereas E-series prostaglandins (PGE) are capable of inducing cell differentiation. Since PGE2 synthesis is up-regulated by IL-1β, we addressed the question of whether the state of chondrocyte differentiation may influence the production of IL-1-induced PGE2 by modulating cyclooxygenase (COX)-2 expression. Immortalized human articular chondrocytes, (tsT/AC62) cultured in monolayer after passage through alginate matrix (alg+) produced 5-fold greater amounts of PGE2 than continuous monolayer cultures (alg-) after stimulation with IL-1β. Moreover, IL-1β induced COX-2 expression at 0.01ng/ml in (alg+) cells, whereas a 100-fold higher dose of cytokine was necessary for stimulation in (alg-) cells. SB203580, a selective p38 mitogen-activated protein kinase (MAPK) inhibitor, completely abolished the IL-1β-induced COX-2 mRNA. Overexpression of p38 MAPK induces a COX-2 reporter, whereas overexpression of dominant negative p38 MAPK represses IL-1β-induced promoter expression. Interestingly, IL-1β-induced p38 MAPK activity was greatly enhanced in (alg+) compared with (alg-) cells. Our results suggest that differentiated articular chondrocytes are highly responsive to IL-1β and that p38 MAPK mediates this response by inducing COX-2 gene expression.