Decidualization of human endometrial stromal cells (hESCs) is crucial for successful uterine implantation and maintaining pregnancy. We previously reported that phospholipase D1 (PLD1) is required for cAMP‐induced decidualization of hESCs. However, the mechanism by which phosphatidic acid (PA), the product of PLD1 action, might regulate decidualization is not known. We confirmed that PA induced decidualization of hESCs by observing morphological changes and measuring increased levels of decidualization markers such as IGFBP1 and prolactin transcripts (P < 0.05). Treatment with PA reduced phosphorylation of Akt and consequently that of FoxO1, which led to the increased IGFBP1 and prolactin mRNA levels (P < 0.05). Conversely, PLD1 knockdown rescued Akt phosphorylation. Binding of PP2A and Akt increased in response to cAMP or PA, suggesting that their binding is directly responsible for the inactivation of Akt during decidualization. Consistent with this observation, treatment with okadaic acid, a PP2A inhibitor, also inhibited cAMP‐induced decidualization by blocking Akt dephosphorylation.