PRL, a hormone secreted essentially by the pituitary and other extrapituitary sources such as decidua, has been attributed regulatory roles in reproduction and cell growth in mammals. These effects are mediated by a membrane PRL receptor belonging to the cytokine receptor superfamily. Null mutation of the PRL receptor gene leads to female sterility due to a severely compromised preimplantation development and a complete failure of the implantation of the few embryos reaching the blastocyst stage, strongly implicating PRL in the maternal control of implantation. We measured the hormonal status of −/− mice, which confirmed that the corpus luteum is unable to produce progesterone. Progesterone administration to −/− mice completely rescued the development of preimplantatory eggs and embryo implantation. Pregnancy could be maintained to 19.5 days postcoitum, with about 22% of resulting embryos reaching adulthood. Although progesterone and perhaps PRL appear to facilitate mouse preembryo development throughout the preimplantation stages, other factors as well as a possible direct effect of PRL on the uterus are probably necessary to fully maintain pregnancy. Finally, reduced ductal side-branching in the mammary gland can be rescued by progesterone treatment, but females exhibit reduced alveolar formation. Our model establishes the PRL receptor as a key regulator of reproduction and provides novel insights into the function of lactogenic hormones and their receptor.