Progesterone receptor (PR) is a marker of estrogen action. Its cellular appearance during estrogen (20 mg/kg i.m.)-induced differentiation of the immature chick oviduct was therefore studied by immunohistochemistry. PR was located in the epithelial, mesothelial, submucosal stromal and smooth muscle cells. Progesterone (20 mg/kg i.m.) caused an obvious decrease in PR immunoreactivity without inducing synthesis of progesterone-dependent avidin. Thus mere receptor occupation by ligand is not sufficient for this induction. This paper reports that the expression of PR in the mucosal stromal cell differs from that in other cell types. In the mucosal stromal cell PR was inducible, i.e., not shown without the action of estrogen. The formation of tubular glands did not commence before mucosal stromal cells expressed PR. It would seem that the mucosal stromal cells have a crucial role in mediating epithelial differentiation. The onset of differentiation was preceded by vascularization and invasion of mononuclear cells in the submucosa. It was conspicuous that the smooth muscle cells of arteries also contained PR.