Fetal membrane activation is seen as being one of the crucial triggering components of human parturition. Increased prostaglandin E2 (PGE2) production, a common mediator of labor onset in virtually all species, is recognized as one of the landmark events of membrane activation. Fetal membranes are also equipped with high capacity of cortisol regeneration by 11β-hydroxysteroid dehydrogenase 1 (11β-HSD1), and cortisol regenerated potently induces PGE2 synthesis, an effect normally suppressed by progesterone during gestation. There is no precipitous decline of progesterone synthesis in human parturition. It is intriguing how this suppression is lifted in parturition. Here, we investigated this issue by using human amnion tissue and primary amnion fibroblasts which synthesize the most PGE2 in the fetal membranes. Results showed that the expression of 11β-HSD1 and aldo-keto reductase family 1 member C1 (AKR1C1), a progesterone inactivating enzyme, increased in parallel in human amnion tissue with gestational age toward the end of gestation and at parturition. Cortisol induced AKR1C1 expression via the transcription factor CCAAT enhancer binding protein δ (C/EBPδ) in amnion fibroblasts. Inhibition of AKR1C1 not only blocked progesterone catabolism induced by cortisol, but also enhanced the suppression of cortisol-induced cyclooxygenase-2 (COX-2) expression by progesterone in amnion fibroblasts. In conclusion, our results indicate that cortisol regenerated in the fetal membranes triggers local progesterone withdrawal through enhancement of AKR1C1-mediated progesterone catabolism in amnion fibroblasts, so that the suppression of progesterone on the induction of COX-2 expression and PGE2 synthesis by cortisol can be lifted for parturition.