We have previously shown that prostaglandin E2 and other cAMP elevating agents inhibit the nuclear transcription of the human IL-2 gene by interfering with a Ca(2+)-sensitive T cell signal transduction pathway. Calcineurin, a Ca2+/calmodulin-dependent 2B protein phosphatase, is an essential component of the T cell receptor signal transduction pathway leading to IL-2 gene expression. We have therefore tested the hypothesis that this phosphatase may be a target for the inhibitory effects of cAMP on IL-2 gene transcription. We report here that PGE2 markedly reduces the IL-2 promoter activity that is induced by a constitutively active form of calcineurin. In contrast to the complete inhibition of promoter activity produced by the immunosuppressants cyclosporin A and FK-506, this partial block suggests that PGE2 modulates downstream events needed for lymphokine gene activation. Overexpression of calcineurin in Jurkat cells decreases their apparent sensitivity to the inhibitory effects of PGE2 consistent with the fact that this enzyme plays a physiological role in dephosphorylating substrates of cAMP-dependent kinases in several tissues. These results provide evidence that cAMP-dependent pathways may antagonize calcineurin-regulated cascades for T cell activation in vivo, and suggest crosstalk between the Ca2+ and the cAMP signaling pathways during T cell activation.