Breast cancer progression involves intricate interactions between cancer cells and the tumor microenvironment (TME). This study elucidates the critical role of progesterone receptor (PR) signaling in mediating the pro-tumorigenic effects of cancer-associated fibroblasts (CAFs) on estrogen receptor-positive (ER+) luminal breast cancer cells. We demonstrate that CAFs produce physiologically relevant levels of estrogen and progesterone, which significantly contribute to breast cancer tumorigenicity. Specifically, CAF-conditioned media promoted PR-dependent anchorage-independent growth, tumorsphere formation/stem cell expansion, and CD44 upregulation. CAF cells formed co-clusters more frequently with PR+ breast cancer cells relative to PR-null models. While both PR isoforms mediated these actions, PR-A was a dominant driver of tumorsphere formation/stemness, while PR-B induced robust CD44 expression and CAF/tumor cell co-cluster formation. CD44 knockdown impaired CAF/tumor cell co-clustering. Fibroblast growth factor 2 (FGF2), also secreted by CAFs, phosphorylated PR (Ser294) in a MAPK-dependent manner and activated PR to enhance CD44 expression and breast cancer tumorigenicity. The FGFR inhibitor, PD173074, diminished CAF- and FGF2-dependent PR activation, tumorsphere formation, and co-clustering. In summary, this study reveals a novel mechanism through which stromal CAFs orchestrate elevated PR signaling in ER+ luminal breast cancer via secretion of both progesterone and FGF2, a potent activator of ERK1/2. Understanding tumor cell/TME interactions provides insights into potential therapeutic strategies aimed at disrupting PR- and/or FGF2/FGFR-dependent signaling pathways to prevent early metastasis in ER+ breast cancer patients.