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Contraction and remodeling of granulation tissue by fibroblasts is a crucial component of dermal wound healing. Postnatal wounds heal with imperfect repair and scar formation, whereas tissue repair in fetal wounds is regenerative. Prostaglandin E2 (PGE2) modulates the behavior of fibroblasts in the wound bed. This study was designed to investigate the mechanism by which PGE2 regulates an in vitro model of granulation tissue, anchored collagen gels, by human adult and fetal dermal fibroblasts. We hypothesized that PGE2 differentially regulates contraction and remodeling of anchored collagen gels by these fibroblast phenotypes. These results indicate that once tension was generated, fetal fibroblasts exerted lower contractile forces resulting in less collagen contraction. This coincided with less prominent stress fibers, yet fetal fibroblasts were able to substantially remodel the collagen architecture. This mechanism was differentially modulated by PGE2 and was mimicked with a PGE2 receptor agonist, indicating a cyclic adenosine monophosphate (cAMP)-dependent mechanism through the EP2 receptor. However, direct up-regulation of cAMP led to decreases in contraction and remodeling by both fibroblast phenotypes indicating an altered signaling pathway. Therefore, targeting cAMP via the EP2 receptor could potentially decrease adult fibroblast contractile forces to the levels of the fetal fibroblast phenotype in order to decrease dermal scarring.