Differentiation of human endometrial stromal cells into specialized decidual cells is critical for embryo implantation and survival of the conceptus. Initiation of this differentiation process is strictly dependent on elevated cAMP levels, but the signal intermediates that control the expression of decidual marker genes, such as prolactin (PRL) and IGFBP1, remain poorly characterized. Here we show that cAMP-dependent decidualization can be attenuated or enhanced upon treatment of primary cultures with a nicotinamide adenine dinucleotide phosphate (NADPH) oxidase inhibitor (diphenylen iodonium) or activator (apocynin), respectively. Time-course analysis demonstrated that cAMP enhances endogenous reactive oxygen species production, apparent after 12 h of stimulation, which coincides with a dramatic increase in decidual PRL and IGFBP1 expression. Knockdown of the Rho GTPase RAC1, which disables activation of the NADPH oxidase homologs NADPH oxidase (NOX)-1, NOX-2, and NOX-3, had no effect on PRL or IGFBP1 expression. In contrast, silencing of NOX-4, or its cofactor p22(PHOX), inhibited the expression of both decidual markers. Finally, we show that the NOX-4/p22(PHOX) complex regulates the DNA-binding activity of CCAAT/enhancer binding protein-β, a key regulator of human endometrial stromal cell differentiation. Thus, NOX-4 activation and reactive oxygen species signaling play an integral role in initiating the endometrial decidual response in preparation of pregnancy.