Kidney formation involves patterning events that induce renal progenitors to form nephrons with an intricate composition of multiple segments. Here, we performed a chemical genetic screen using zebrafish and discovered that prostaglandins, lipid mediators involved in many physiological functions, influenced pronephros segmentation. Modulating levels of prostaglandin E2 (PGE2) or PGB2 restricted distal segment formation and expanded a proximal segment lineage. Perturbation of prostaglandin synthesis by manipulating Cox1 or Cox2 activity altered distal segment formation and was rescued by exogenous PGE2. Disruption of the PGE2 receptors Ptger2a and Ptger4a similarly affected the distal segments. Further, changes in Cox activity or PGE2 levels affected expression of the transcription factors irx3b and sim1a that mitigate pronephros segment patterning. These findings show for the first time that PGE2 is a regulator of nephron formation in the zebrafish embryonic kidney, thus revealing that prostaglandin signaling may have implications for renal birth defects and other diseases.