The actions of glucocorticoids at the feto-maternal interface are not well understood. Here, we show that decidualization of human endometrial stromal cells (HESCs) in response to progesterone and cAMP signaling is associated with a strong induction of 11β-hydroxysteroid dehydrogenase type 1 (11βHSD1) expression and enzyme activity. Decidualization also triggered a gradual decrease in glucocorticoid receptor (GR) expression and reciprocal increase in mineralocorticoid receptor (MR) levels. Gene expression profiling of differentiating HESCs after small interfering RNA (siRNA)-mediated knockdown of either GR or MR identified 239 and 167 significantly regulated genes, respectively. Interestingly, GR-repressed genes were enriched for Krüppel-associated box domain containing zinc-finger proteins, transcriptional repressors involved in heterochromatin formation. In agreement, GR knockdown was sufficient to enhance trimethylated H3K9 levels in decidualizing cells. Conversely, we identified several MR-dependent genes implicated in lipid droplet biogenesis and retinoid metabolism. For example, the induction in differentiating HESCs of DHRS3, encoding a highly conserved enzyme that catalyzes the oxidation/reduction of retinoids and steroids, was enhanced by aldosterone, attenuated in response to MR knockdown, and abolished upon treatment with the MR antagonist RU26752. Furthermore, we demonstrate that decidualization is associated with dynamic changes in the abundance and distribution of cytoplasmic lipid droplets, the formation of which was blocked by RU26752. In summary, progesterone drives local cortisol biosynthesis by decidual cells through induction of 11β-hydroxysteroid dehydrogenase type 1 (11βHSD1), leading to transcriptional regulation of distinct GR and MR gene networks involved in epigenetic programming and lipid and retinoid metabolism, respectively.