The ovarian steroid progesterone, acting through the progesterone receptor (PR), coordinates endometrial epithelial-stromal cell communication, which is critical for its development and function. PR expression in these cellular compartments is under tight temporal and endocrine control. Although ex vivo studies demonstrated the importance of stromal PR expression, they failed to show a role for epithelial PR in uterine function. Here, the in vivo role of PR in the uterine epithelium is defined using floxed PR (PR f/f) mice crossed to Wnt7a-Cre mice. Progesterone was unable to stimulate the expression of its epithelial target genes, including Ihh, in the Wnt7a-Cre+ PR f/− mice. Analysis was conducted on Ihh to determine whether PR directly regulates epithelial gene transcription. ChIP-on-chip analysis identified PR binding sites in the 5′-flanking region of Ihh. Cotransfection of the proximal Ihh promoter with PR demonstrated that PR directly regulates Ihh transcription. Female Wnt7a-Cre+ PR f/− mice are infertile due to defects in embryo attachment, stromal cell decidualization, and the inability to cease estrogen-induced epithelial cell proliferation. Finally, progesterone was unable to inhibit neonatal endometrial glandular development in Wnt7a-Cre+ PR f/− mice. Thus, epithelial PR is necessary for the regulation of progesterone epithelial target gene expression, as well as uterine function and development.—Franco, HL, Rubel, CA, Large, MJ, Wetendorf, M., Fernandez-Valdivia, R., Jeong, J.-W., Spencer, TE, Behringer, RR, Lydon, JP, DeMayo, FJ Epithelial progesterone receptor exhibits pleiotropic roles in uterine development and function.