Progesterone (P) has been widely used in an attempt to prevent threatened miscarriage, recurrent miscarriage and pre-term labour. Successful pregnancy depends on maternal tolerance of the fetal "semi-allograft". Along with its endocrine effects, P also acts as an "immunosteroid", by controlling the bias towards a pregnancy protective immune milieu. A protein called progesterone-induced blocking factor (PIBF), by inducing a Th2 dominant cytokine production mediates the immunological effects of progesterone. Progesterone plays a role in uterine homing of NK cells and up-regulates HLA-G gene expression, the ligand for various NK inhibitory receptors. At high concentrations, progesterone is a potent inducer of Th2-type cytokines as well as of LIF and M-CSF production by T cells. The possible mechanisms by which progesterone contributes to the maintenance of early and late pregnancy are discussed.