The ontogeny and functional role of steroidogenesis during mammalian gestation is poorly understood. This review provides a summary of our recent findings on the spatio-temporal expression of key steroidogenic genes controlling progesterone synthesis in the uterus during mouse pregnancy. We have shown that onset of cholesterol side chain cleavage cytochrome P450 (P450scc) and a newly identified isoform of murine 3beta-hydroxysteroid dehydrogenase/isomerase type VI (3betaHSD VI) expression occurs upon decidualization of the uterine wall induced by implantation. This unexpected early expression of the enzymes in the maternal decidua is terminated at mid-pregnancy when the steroidogenic ability reappears in the extraembryonic giant cells at the time of placentation. The giant cells express another protein indispensable for steroid hormone synthesis in the adrenal and gonads, Steroidogenic Acute Regulatory (StAR) protein. Unlike the human placenta, the steroidogenic genes are not expressed in the cells of the mature mouse placenta during the second half of gestation. Finally, our studies suggest that transcriptional regulation of P450scc is mediated by a non-SF-1 protein that substitutes SF-1 functions in the extraembryonic cells. Collectively, the results of the present study suggest that, during early phases of pregnancy, local progesterone synthesis in the maternal decidua and the trophoblast layers surrounding the embryonal cavity is important for successful implantation and/or maintenance of pregnancy. We propose that the local production of progesterone acts as an immunosuppressant at the maternofetal interface preventing the rejection of the fetal allograft.