Misoprostol is a life-saving drug in many developing countries for women at risk of post-partum hemorrhaging owing to its affordability, stability, ease of administration and clinical efficacy. However, misoprostol lacks receptor and tissue selectivities, and thus its use is accompanied by a number of serious side effects. The development of pharmacological agents combining the advantages of misoprostol with improved selectivity is hindered by the absence of atomic details of misoprostol action in labor induction. Here, we present the 2.5 Å resolution crystal structure of misoprostol free-acid form bound to the myometrium labor-inducing prostaglandin E2 receptor 3 (EP3). The active state structure reveals a completely enclosed binding pocket containing a structured water molecule that coordinates misoprostol's ring structure. Modeling of selective agonists in the EP3 structure reveals rationales for selectivity. These findings will provide the basis for the next generation of uterotonic drugs that will be suitable for administration in low resource settings.