Progesterone receptor (PR), a ligand-activated transcription factor, is a key regulator of cellular proliferation and differentiation in reproductive tissues. The transcriptional activity of PR is influenced by co-regulatory proteins typically expressed in a tissue-and cellspecific fashion. We previously demonstrated that basic transcription element-binding protein-1 (BTEB1), a member of the Sp/Krü ppel-like family of transcription factors, functionally interacts with the two PR isoforms, PR-A and PR-B, to mediate progestin sensitivity of target genes in endometrial epithelial cells in vitro. Here we report that ablation of the Bteb1 gene in female mice results in uterine hypoplasia, reduced litter size, and increased incidence of neonatal deaths in offspring. The reduced litter size is solely a maternal genotype effect and results from fewer numbers of implantation sites, rather than defects in ovulation. In the early pregnant uterus, Bteb1 expression in stromal cells temporally coincides with PR-A isoform-dependent decidual formation at the time of implantation. Expression of two implantation-specific genes, Hoxa10 and cyclin D3, was decreased in uteri of early pregnant Bteb1-null mutants, whereas that of Bteb3, a related family member, was increased, the latter possibly compensating for the loss of Bteb1. Progesterone responsiveness of several uterine genes was altered with Bteb1-null mutation. These results identify Bteb1 as a functionally relevant PR-interacting protein and suggest its selective modulation of cellular processes that are regulated by PR-A in the uterine stroma.