Abstract Persistence of intracellular infection depends on the exploitation of factors that negatively regulate the host immune response. In this study, we elucidated the role of macrophage PGE2, an immunoregulatory lipid, in successful survival of Leishmania donovani, causative agent of the fatal visceral leishmaniasis. PGE2 production was induced during infection and resulted in increased cAMP level in peritoneal macrophages through G protein–coupled E-series prostanoid (EP) receptors. Among four different EPs (EP1–4), infection upregulated the expression of only EP2, and individual administration of either EP2-specific agonist, butaprost, or 8-Br–cAMP, a cell-permeable cAMP analog, promoted parasite survival. Inhibition of cAMP also induced generation of reactive oxygen species, an antileishmanial effector molecule. Negative modulation of PGE2 signaling reduced infection-induced anti-inflammatory cytokine polarization and enhanced inflammatory chemokines, CCL3 and CCL5. Effect of PGE2 on cytokine and chemokine production was found to be differentially modulated by cAMP-dependent protein kinase A (PKA) and exchange protein directly activated by cAMP (EPAC). PGE2-induced decreases in TNF-α and CCL5 were mediated specifically by PKA, whereas administration of brefeldin A, an EPAC inhibitor, could reverse decreased production of CCL3. Apart from modulating inflammatory/anti-inflammatory balance, PGE2 inhibited antileishmanial IL-17 cytokine production in splenocyte culture. Augmented PGE2 production was also found in splenocytes of infected mice, and administration of EP2 antagonist in mice resulted in reduced liver and spleen parasite burden along with host-favorable T cell response. These results suggest that Leishmania facilitates an immunosuppressive environment in macrophages by PGE2-driven, EP2-mediated cAMP signaling that is differentially regulated by PKA and EPAC.