Human endometrial fibroblasts have been immortalized by infection with simian virus 40 large T antigen and established as a permanent cell line, St-2. Biochemical differentiation of this cell line has been demonstrated by the ability of a decidualizing stimulus, 8-bromo-cAMP plus medroxyprogesterone acetate (MPA), to induce PRL secretion and increase the enzymatic activity of estrone sulfatase. MPA, alone or in combination with estradiol, was unable to elicit this response, but potentiated the effect of 8-bromo-cAMP on PRL production and estrone sulfatase activity. The increase in PRL protein was accompanied by an increase in PRL messenger RNA and increased expression of the insulin-like growth factor-binding protein-1 messenger RNA. The St-2 cell PRL transcript was larger than the pituitary PRL transcript, suggesting its initiation from the distal, nonpituitary, PRL promoter. This was confirmed by reverse transcription-PCR analysis of PRL transcripts using primers specific for the additional sequences present only in the 5'-untranslated region of RNA initiated from the distal promoter. Transient transfection of a reporter construct containing 3000 bp of DNA 5' to the decidual-specific promoter of the human PRL gene demonstrated that cAMP was capable of activating this distal promoter in St-2 cells. In conclusion, this novel cell line provides an interesting new model in which to pursue aspects of biochemical differentiation of human endometrium in vitro.