Thymic epithelial cell line TEA3A1 produce prostaglandin E2 (PGE2) and express high levels of annexin I. In order to study the relationship between the levels of annexin I expression and the arachidonic acid metabolism, TEA3A1 cells transfected with expression vector containing full length annexin I cDNA in either sense or anti-sense orientation was studied. In the anti-sense cells where the level of annexin I was reduced, the PGE2 production was significantly lower. On the other hand, PGE2 production was significantly higher in sense cells where the production of annexin I was also higher than in control cells. Our results show that increased PGE2 production in sense cells was accompanied by higher levels of PLA2 enzymatic activities. These results suggest that the production of annexin I is positively associated with the phospholipase A2 enzymatic activity and the prostaglandin production in thymic epithelial cells.