TGFbeta1 is thought to be intimately involved in cyclic tissue remodeling and inflammatory events associated with menstruation. Menstruation is initiated by progesterone withdrawal; however, the underlying mechanisms are not well understood. In the present study, we have tested the hypothesis that locally produced TGFbeta1 may influence expression of progesterone receptor (PR) or the Wnt antagonist Dickkopf-1 (DKK) with consequential impact on regulation of menstruation. Endometrial stromal cells (ESC) were isolated from endometrial biopsy samples collected from patients undergoing gynecological procedures for benign indications. Treatment of differentiated ESC with TGFbeta1 (10 ng/ml) significantly inhibited the expression of mRNAs encoding PR and DKK. TGFbeta1 also attenuated the protein expression of PR and secretion of DKK proteins in culture supernatants. Neutralization of endogenous TGFbeta1 signaling abolished the TGFbeta1-induced effects, significantly increased expression of PR, and increased DKK protein release levels to that of differentiated ESCs, confirming the specificity of the TGFbeta1 effect. Additionally, in vitro decidualization of ESCs significantly augmented DKK protein release. Moreover, although TGFbeta1 was capable of signaling via the Sma- and mothers against decapentaplegic (MAD)-related protein (SMAD) pathway, the inhibitory effect on DKK was SMAD independent. Conversely, the inhibitory effect of TGFbeta1 on PR was dependent on SMAD signal transduction. In conclusion, these results suggest that local TGFbeta1 signaling can potentiate progesterone withdrawal by suppressing expression of PR and may coordinate tissue remodeling associated with menstruation by inducing Wnt-signaling via inhibition of DKK, which we found to be up-regulated as a consequence of decidualization of ESCs.