In previous studies we demonstrated that PTH stimulates production of prostaglandin E2 (PGE2) by intact chick calvaria. In the present series of experiments, two cell populations were isolated from chick calvaria by centrifugation on a 25%/55% Percoll gradient. Cells harvested from the upper band of the Percoll gradient (designated F-1) appeared large and spindle-shaped in culture. Cells harvested from the lower band of the Percoll gradient (designated F-2) were relatively small and polygonal-shaped. Both cell populations required fetal bovine serum (FBS) for attachment and proliferation. In the presence of FBS the cells formed multilayers, but they formed confluent monolayers in the presence of heat-inactivated FBS. The pattern of cAMP responses to different effectors and biochemical determinations for alkaline and acid phosphatase suggests that the F-2 fraction consists primarily of osteoblasts. No cells with osteoclastic patterns appeared in either fraction. Both cell types synthesized predominantly PGD2. PGE2 was also produced, however, in considerably smaller quantities. PG production in the presence of ionophore A23187 (1 microM) or arachidonate (10 microM) increased significantly when the F-1 and F-2 cells were cocultured at a 1:1 ratio. These results suggest that cell to cell or cell to matrix interactions normally present in intact bone influence PG synthesis.