Progesterone receptor membrane component 1 (PGRMC1) is a 25 kDa protein with an N-terminal transmembrane domain and a putative C-terminal cytochrome b5 domain. Heme-binding activity of PGRMC1 has been shown in various homologues of PGRMC1. Although the general definition of PGRMC1 is as a progesterone receptor, progesterone-binding activity has not been directly demonstrated in any of the purified PGRMC1 proteins fully loaded with heme. Here, we show that the human homologue of PGRMC1 (hPGRMC1) binds heme in a five-coordinate (5C) high-spin (HS) configuration, with an axial tyrosinate ligand, likely Y95. The negatively charged tyrosinate ligand leads to a relatively low redox potential of approximately -331 mV. The Y95C or Y95F mutation dramatically reduces the ability of the protein to bind heme, supporting the assignment of the axial heme ligand to Y95. On the other hand, the Y95H mutation retains ∼90% of the heme-binding activity. The heme in Y95H is also 5CHS, but it has a hydroxide axial ligand, conceivably stabilized by the engineered-in H95 via an H-bond; CO binding to the distal ligand-binding site leads to an exchange of the axial ligand to a histidine, possibly H95. We show that progesterone binds to hPGRMC1 and introduces spectral changes that manifest conformational changes to the heme. Our data offer the first direct evidence supporting progesterone-binding activity of PGRMC1.