We have developed an in-vitro co-culture system to examine the interaction between purified first trimester cytotrophoblasts and purified non-pregnant human endometrial stromal cells (ESC). ESC decidualization is an important step in endometrial maturation and may modulate embryo implantation. In order to investigate the effects of ESC decidualization on trophoblast function, we examined human chorionic gonadotrophin (HCG), human placental lactogen (HPL), progesterone and estrogen secretion by trophoblasts co-cultured in contact with ESC, either with or without decidualization induced by progesterone. Decidualized ESC inhibited basal HCG and HPL secretion for 3 days during the culture for HCG, and for 5 days during the culture for HPL (P < 0.01 and P < 0.03 respectively). After 5 days of co-culture, decidual transformation of ESC as indicated by prolactin production occurred in the control cultures due to progesterone and oestradiol secretion by the co-cultured trophoblasts, but no significant differences in HCG or HPL secretion were observed between the two groups. Although the type of trophoblast used in the present study is far from implantation, our results clearly demonstrated that HCG and HPL secretion by trophoblasts was inhibited by the presence of co-cultured decidualized ESC, and suggested that ESC decidualization may regulate trophoblast function at the human fetal-maternal interface.