Furosemide is a potent vasodilator of the systemic arterial and venous systems. The mechanism of vasodilatation, however, remains unclear. We investigated the vasodilatory effect of furosemide and its relation to endogenous prostaglandins (PGs). In the isolated canine lung lobe, furosemide significantly decreased mean pulmonary artery pressure. This effect was inhibited by indomethacin. Furosemide also attenuated the pulmonary vasoconstrictor response to the endoperoxide analog U46619 and PGF2 alpha. The pulmonary pressor response to a submaximal constrictor dose of arachidonic acid was significantly enhanced by furosemide, however, the pressor response to a maximal constrictor dose of arachidonic acid was attenuated, although not significantly. In animals pretreated with indomethacin, furosemide had no effect on the vascular response to PGF2 alpha, but the response to U46619 was significantly increased. Prostacyclin reduced pulmonary perfusion pressure and inhibited the pressor response to PGF2 alpha and U46619. Furosemide failed to alter inactivation of PGE2 on pulmonary lobe transit. We conclude that: 1) the vasodilatory activity of furosemide is mediated by increased production and not decreased metabolism of an endogenous cyclooxygenase product; 2) the effect of prostacyclin on vascular reactivity is similar to that of furosemide; and 3) local formation of prostacyclin by vascular tissue most likely mediates the vascular activity of furosemide.