The roles of progesterone (P(4)) and of progesterone receptor (PR) in development and pathogenesis of breast cancer remain unclear. In this study, we observed that treatment of T47D breast cancer cells with progestin antagonized effects of fetal bovine serum (FBS) to stimulate cell proliferation, whereas siRNA-mediated knockdown of endogenous PR abrogated progestin-mediated anti-proliferative effects. To begin to define mechanisms for the anti-proliferative action of P(4)/PR, we considered the role of MAPK phosphatase 1 (MKP-1/DUSP1), which catalyzes dephosphorylation and inactivation of MAPKs. Progestin treatment of T47D cells rapidly induced MKP-1 expression in a PR-dependent manner. Importantly, P(4) induction of MKP-1 was associated with reduced levels of phosphorylated ERK1/2, whereas siRNA knockdown of MKP-1 blocked progestin-mediated ERK1/2 dephosphorylation and repression of FBS-induced cell proliferation. The importance of PR in MKP-1 expression was supported by findings that MKP-1 and PR mRNA levels were significantly correlated in 30 human breast cancer cell lines. By contrast, no correlation was observed with the glucocorticoid receptor, a known regulator of MKP-1 in other cell types. ChIP and luciferase reporter assay findings suggest that PR acts in a ligand-dependent manner through binding to two progesterone response elements downstream of the MKP-1 transcription start site to up-regulate MKP-1 promoter activity. PR also interacts with two Sp1 sites just downstream of the transcription start site to increase MKP-1 expression. Collectively, these findings suggest that MKP-1 is a critical mediator of anti-proliferative and anti-inflammatory actions of PR in the breast.