Decidualization of the endometrium is critical for implantation and placental development. Stromal cells differentiate causing widespread tissue remodeling. The mechanisms involved are unknown, although a number of known paracrine factors play contributory roles. From its known actions on cell differentiation and remodeling, we hypothesized that activin A regulates decidualization. Stromal cells produce activin βA subunits with the onset of decidualization, and these cells coexpress activin receptors. Utilizing an in vitro model of stromal cell decidualization, we demonstrate that high concentrations of dimeric activin A are produced by decidual cells. Addition of activin A to cells undergoing deciduatization resulted in a dose-dependant increase in PRL production, an established marker of decidualization. This response was inhibited by co-treatment with follistatin. Neutralization of endogenous activins significantly reduced the decidual response. This is the first report of dimeric activin A production by decidualized cells, and is evidence for a autocrine/paracrine action of activin A within the endometrium. The demonstration that activin A enhances the decidual reaction in vitro suggests that it plays a key role in promoting stromal cell decidualization. This data provides insights into the processes underlying decidualization, which is important for understanding implantation and placentation and has potential clinical applications for the regulation of fertility.