Objective Many women are seeking alternatives to conventional forms of hormone replacement. This study evaluates the endometrial effects of natural progesterone cream used in conjunction with transdermal oestradiol. Design Open plan study conducted over 48 weeks.Setting Tertiary referral London teaching hospital.Population Women at least two years postmenopausal.Methods Women were recruited nationally. They applied 40 mg transdermal natural progesterone cream and 1 mg transdermal oestradiol daily. Main outcome measures Endometrial histology, assessed by pipelle endometrial biopsy, ultrasound assessment of endometrial thickness and bleeding diaries. Results Fifty-four women were recruited of which 41 completed the study. Mean age was 57.4 years. Thirtytwo percent of women had evidence of inadequate endometrial opposition (proliferative or hyperplastic) at the end of 48 weeks. At baseline, women had a mean endometrial thickness of 3.3 mm, which had significantly thickened to a mean of 5.3 mm by 24 weeks (P < 0.001). By 48 weeks, there was significantly greater increase in endometrial thickness from baseline in those women who displayed inadequate endometrial opposition, compared with those women who had adequate endometrial opposition (P Œ 0.004). At 24 weeks, 48% of women had remained entirely amenorrhoeic. By the end of the study, 35% of women had been entirely amenorrhoeic and 50% had had either no bleeding or spotting alone. The number of bleeding episodes did not reduce with time. Conclusions The dose of natural progesterone cream in this study was insufficient to fully attenuate the mitogenic effect of oestrogen on the endometrium. We would not recommend this combination of hormones to be used by postmenopausal women.