Dysregulation of collagen production contributes to various pathological processes, including tissue fibrosis as well as impaired wound healing. Lipo-prostaglandin E1 (Lipo-PGE1), a lipid microsphere-incorporated prostaglandin E1, is used as a vasodilator for the treatment of peripheral vascular diseases. Lipo-PGE1 was recently shown to enhance human dermal fibroblast (HDF) migration and in vivo wound healing. No published study has characterized the role of Lipo-PGE1 in collagen regulation in HDFs. Here, we investigated the cellular signaling mechanism by which Lipo-PGE1 regulates collagen in HDFs. Collagen production was evaluated by the Sircol collagen assay, Western blot analysis of type I collagen and real time PCR. Unexpectedly, Lipo-PGE1 decreased mRNA expression of collagen 1A1,1A2, and 3A1. Lipo-PGE1 markedly inhibited type I collagen and total soluble collagen production. In addition, Lipo-PGE1 inhibited transforming growth factor-β-induced collagen expression via Smad2 phosphorylation. To further investigate whether extracellular signalregulated kinase (ERK)/Ets-1 signaling, a crucial pathway in collagen regulation, is involved in Lipo-PGE1-inhibited collagen production, cells were pretreated with an ERK-specific inhibitor, PD98059, prior to the addition of Lipo-PGE1. Lipo-PGE1-inhibited collagen mRNA expression and total soluble collagen production were recovered by pretreatment with PD98059. Moreover, Lipo-PGE1 directly induced the phosphorylation of ERK. Furthermore, silencing of Ets-1 recovered Lipo-PGE1-inhibited collagen production and PD98059 blocked Lipo-PGE1-enhanced Ets-1 expression. The present study reveals an important role for Lipo-PGE1 as a negative regulator of collagen gene expression and production via ERK/Ets-1 signaling. These results suggest that Lipo-PGE1 could potentially be a therapeutic target in diseases with deregulated collagen turnover.