To investigate the role of prostaglandin (PG) E₂ in allergen-induced hyperresponsiveness, dogs inhaled either the allergen Ascaris suum or vehicle (Sham). Twenty-four hours after inhalation, some animals exposed to allergen demonstrated an increased responsiveness to acetylcholine challenge in vivo (Hyp-Resp), whereas others did not (Non-Resp). Strips of tracheal smooth muscle, either epithelium intact or epithelium denuded, were suspended on stimulating electrodes, and a concentration-response curve to carbachol (10⁹ to 10⁵ M) was generated. Tissues received electrical field stimulation, and organ bath fluid was collected to determine PGE₂ content. With the epithelium present, all three groups contracted similarly to 10⁵ M carbachol, whereas epithelium-denuded tissues from animals that inhaled allergen contracted more than tissues from Sham dogs. In response to electrical field stimulation, Hyp-Resp tissues contracted less than Sham tissues in the presence of epithelium and more than Sham tissues in the absence of epithelium. PGE₂ release in the muscle bath was greater in Non-Resp tissues than in Sham or Hyp-Resp tissues when the epithelium was present. Removal of the epithelium greatly inhibited PGE₂ release. We conclude that tracheal smooth muscle is hyperresponsive in vitro after in vivo allergen exposure only when the modulatory effect of the epithelium, largely through PGE₂ release, is removed.