We have studied the ability of human fetal membranes (amnion, chorion, and decidua) to produce progesterone. Membranes were obtained from women at 38-41 weeks pregnancy following spontaneous onset of labor. The tissues were dispersed into single cell preparations using 0.05% collagenase in a Krebs-Ringer buffer system. Progesterone was measured by specific RIA. All 3 tissues produced progesterone in a significant dose-response relationship with added pregnenolone but chorion was significantly more active than the other membranes. Equimolar concentrations of dehydroepiandrosterone, estrone or estradiol cause significant inhibition (to 50%) of this activity but dehydroepiandrosterone sulfate and estriol did not. We conclude that human fetal membranes at term can produce progesterone and this production may be modulated by other steroids of fetal or maternal origin. Local regulation of progesterone production, without significant changes in circulating levels of progesterone, may have an important influence on local prostaglandin generation and hence on myometrial contractility.