We have established an in vitro tissue explant incubation system to study endocrine functions of human amnion, chorion, and decidua. By means of this technique, tissues remain histologically similar for at least 72 hours, actively use glucose for at least 48 hours, and demonstrate no evidence of release of lactate dehydrogenase into the medium by 24 hours. All three tissues produced progesterone, measured by specific radioimmunoassay, in a dose-dependent fashion from added pregnenolone. However, chorion was many times more active in this respect than were the other tissues. These results were corroborated by demonstrating conversion of 3H-pregnenolone to radiochemically pure 3H-progesterone. This activity was inhibited by a 3 beta-hydroxysteroid dehydrogenase (3 beta HSD) enzyme inhibitor, trilostane. Histochemical staining identified the site of 3 beta HSD activity as being located predominantly in the trophoblast layer of the chorion. We conclude that: (1) this in vitro system is a simple and reliable method by means of which to study endocrine function of amnion, chorion, and decidua; and (2) human fetal membranes, particularly the trophoblast layer of the chorion, can produce progesterone, and hence may be an important regulator of local progesterone levels, which subsequently may affect myometrial contractility.