In human colorectal adenomas or polyps, cyclooxygenase-2 is expressed predominantly by stromal (or interstitial) macrophages. Therefore, we tested the hypothesis that macrophage cyclooxygenase-2 has paracrine pro-tumorigenic activity using in vitro models of macrophage-epithelial cell interactions. We report that macrophages can promote tumorigenic progression of intestinal epithelial cells (evidenced by decreased cell–cell contact inhibition, increased proliferation and apoptosis, gain of anchorage-independent growth capability, decreased membranous E-cadherin expression, up-regulation of cyclooxygenase-2 expression, down-regulation of transforming growth factor-β type II receptor expression and resistance to the anti-proliferative activity of transforming growth factor-β 1) in a paracrine, cyclooxygenase-2-dependent manner. Pharmacologically relevant concentrations (1–2 μ M) of a selective cyclooxygenase-2 inhibitor had no detectable, direct effect on intestinal epithelial cells but inhibited the macrophage-epithelial cell signal mediating tumorigenic progression. Cyclooxygenase-2-mediated stromal-epithelial cell signalling during the early stages of intestinal tumorigenesis provides a novel target for chemoprevention of colorectal cancer (and other gastro-intestinal epithelial malignancies, which arise on a background of chronic inflammation, such as gastric cancer) and may explain the discrepancy between the concentrations of cyclooxygenase inhibitors required to produce anti-neoplastic effects in vitro and in vivo.