The steroid hormone progesterone (P(4)) plays a key role in the reproductive events associated with pregnancy establishment and maintenance. High concentrations of circulating P(4) in the immediate post-conception period have been associated with an advancement of conceptus elongation, an associated increase in interferon-tau production and higher pregnancy rates in cattle. Using in vitro and in vivo models and approximately 8500 bovine oocytes across six experiments, the aim of this study was to establish the route through which P(4) affects bovine embryo development in vitro and in vivo. mRNA for P(4) receptors was present at all stages of embryo development raising the possibility of a direct effect of P(4) on the embryo. Exposure to P(4) in vitro in the absence or presence of oviduct epithelial cells did not affect the proportion of embryos developing to the blastocyst stage, blastocyst cell number or the relative abundance of selected transcripts in the blastocyst. Furthermore, exposure to P(4) in vitro did not affect post-hatching elongation of the embryo following transfer to synchronized recipients and recovery on Day 14. By contrast, transfer of in vitro derived blastocysts to a uterine environment previously primed by elevated P(4) resulted in a fourfold increase in conceptus length on Day 14. These data provide clear evidence to support the hypothesis that P(4)-induced changes in the uterine environment are responsible for the advancement in conceptus elongation reported previously in cattle and that, interestingly, the embryo does not need to be present during the period of high P(4) in order to exhibit advanced elongation.