The effect of progestogens on bone is controversial with some studies suggesting an anabolic action while others show no effect. Prereceptor metabolism via localized expression of specific enzymes may have major impact on progesterone action in bone and may explain some of the discrepancies between studies. We therefore investigated the metabolism of progesterone in primary cultures of human osteoblasts and MG-63 osteoblastic cells. Osteoblasts and MG-63 cells were incubated with 4- (14)C-progesterone tracer and 50 nM unlabeled progesterone, and magnitude and pattern of progesterone metabolism were determined by two-dimensional thin-layer chromatography. Conventional and Taqman real-time PCR analysis were used to assess expression of progesterone metabolizing enzymes. In both types of cells the two major metabolic products of progesterone were 20 alpha-dihydroprogesterone and 5 alpha-dihydroprogesterone, but conversion to 3 alpha, 5 alpha- and 3 beta, 5 alpha-tetrahydroprogesterone was also detected. This activity was concomitant with expression of mRNAs for the enzymes AKR1C1, 5 alpha-reductase type 1 and AKR1C2, and 3 beta-HSD type 1 and 3-hydroxysteroid epimerase. In MG-63 cells progesterone metabolism was largely mediated via 5 alpha-reductase. In primary osteoblasts progesterone metabolism was unaffected by treatment with dexamethasone or estradiol, but in MG-63 cells dexamethasone pretreatment increased 5 alpha-reductase activity. Progesterone is subject to extensive intracellular inactivation in human osteoblasts, with potential attenuation of local progesterone receptor responses. Conversely, osteoblasts have the capacity to convert progestogens to metabolites reported to have anabolic actions through the estrogen receptor.