Progesterone, an agonist for the progesterone receptor (PR), can be an efficacious and well-tolerated treatment in endometrial cancer. The clinical use of progesterone is limited because of the lack of biomarkers that predict hormone sensitivity. Despite its efficacy in cancer therapy, mechanisms and site of action for progesterone remain unknown. Using an in vivo endometrial cancer mouse model driven by clinically relevant genetic changes but dichotomous responses to hormonal therapy, we show that signaling through stromal PR is necessary and sufficient for progesterone antitumor effects. Endometrial cancers resulting from epithelial loss of PTEN (PTENKO) were hormone sensitive and had abundant expression of stromal PR. Stromal deletion of PR as a single genetic change in these tumors induced progesterone resistance indicating that paracrine signaling through the stroma is essential for the progesterone therapeutic effects. A hormone-refractory endometrial tumor with low levels of stromal PR developed when activation of KRAS was coupled with PTEN-loss (PTENKO/Kras). The innate progesterone resistance in PTENKO/Kras tumors stemmed from methylation of PR in the tumor microenvironment. Add-back of stromal PR expressed from a constitutively active promoter sensitized these tumors to progesterone therapy. Results show that signaling through stromal PR is sufficient for inducing hormone responsiveness. Our findings suggest that epigenetic derepression of stromal PR could be a potential therapeutic target for sensitizing hormone-refractory endometrial tumors to progesterone therapy. On the basis of these results, stromal expression of PR may emerge as a reliable biomarker in predicting response to hormonal therapy.