Depending on the tissue, progesterone is classified as a proliferative or a differentiative hormone. To explain this paradox, and to simplify analysis of its effects, we used a breast cancer cell line (T47D-YB) that constitutively expresses the B isoform of progesterone receptors. These cells are resistant to the proliferative effects of epidermal growth factor (EGF). Progesterone treatment accelerates T47D-YB cells through the first mitotic cell cycle, but arrests them in late G1 of the second cycle. This arrest is accompanied by decreased levels of cyclins D1, D3, and E, disappearance of cyclins A and B, and sequential induction of the cyclin-dependent kinase (cdk) inhibitors p21 and p27(Kip1). The retinoblastoma protein is hypophosphorylated and extensively down-regulated. The activity of the cell cycle-dependent protein kinase, cdk2, is regulated biphasically by progesterone: it increases initially, then decreases. This is consistent with the biphasic proliferative increase followed by arrest produced by one pulse of progesterone. A second treatment with progesterone cannot restart proliferation despite adequate levels of transcriptionally competent PR. Instead, a second progesterone dose delays the fall of p21 and enhances the rise of p27(Kip1), thereby intensifying the progesterone resistance in an autoinhibitory loop. However, during the progesterone-induced arrest, the cell cycling machinery is poised to restart. The first dose of progesterone increases the levels of EGF receptors and transiently sensitizes the cells to the proliferative effects of EGF. We conclude that progesterone is neither inherently proliferative nor antiproliferative, but that it is capable of stimulating or inhibiting cell growth depending on whether treatment is transient or continuous. We also suggest that the G1 arrest after progesterone treatment is accompanied by cellular changes that permit other, possibly tissue-specific, factors to influence the final proliferative or differentiative state.