Overweight or obese women are at increased risk of developing and dying from breast cancer. Obesity-driven inflammation may stimulate prostaglandin E₂ (PGE₂)-mediated aromatase activation and estrogen biosynthesis in breast tissues. We hypothesized that increased production of PGE₂ would contribute to elevated breast cancer risk in postmenopausal women. We carried out a case–cohort study with 307 incident breast cancer cases and 300 subcohort members from the Sister Study cohort. HRs and 95% confidence intervals (CI) were estimated for the association between urinary levels of a major PGE₂ metabolite (PGE-M) and breast cancer risk using Prentice's pseudo-likelihood approach. Several lifestyle factors were associated with urinary levels of PGE-M: smoking, high-saturated fat diet, and obesity increased urinary PGE-M, and use of nonsteroidal antiinflammatory drugs (NSAID) decreased urinary PGE-M. Although there was no association between urinary PGE-M and postmenopausal breast cancer risk in the overall analysis or among regular users of NSAIDs, there was a positive association among postmenopausal women who did not regularly use NSAIDs with HRs of 2.1 [95% confidence interval (CI): 1.0–4.3]; 2.0 (95% CI: 1.0–3.9); and 2.2 (95% CI: 1.1–4.3) for the second, third, and highest quartiles of PGE-M. Our findings suggest a link between systemic PGE₂ formation and postmenopausal breast cancer, and a possible modification of the association by lifestyle and pharmacologic interventions. If confirmed in larger studies, these results may have useful implications for the development of preventive strategies. Cancer Prev Res; 6(6); 511–8. ©2013 AACR.