Heparin-binding epidermal growth factor-like growth factor (HB-EGF) cDNA was isolated from a subtracted cDNA library that selected for progesterone-induced transcripts from rat uterine stromal cells. In this study, the effects of progesterone and estradiol on the expression of HB-EGF in mature rat uterine epithelial and stromal cells have been examined. RNase protection assays and in situ hybridization demonstrated that progesterone stimulated expression of HB-EGF in rat uterine stromal cells, but repressed levels of HB-EGF mRNA in luminal and glandular epithelial cells. In contrast, estradiol treatment strongly enhanced HB-EGF expression in epithelial cells, but had no effect on mRNA levels for this growth factor in stromal cells. Progesterone treatment followed by estradiol injection stimulated HB-EGF expression in stromal cells and repressed expression in luminal and glandular epithelium. Stimulation of HB-EGF expression in stromal cells by progesterone was not inhibited by treatment with cycloheximide, demonstrating that HB-EGF mRNA expression is a primary response of stromal cells to progesterone. These results reveal that expression of HB-EGF is stimulated in epithelial and stromal cells in vivo under the same hormonal conditions that induce cell proliferation in each of these cell types and strongly suggest that HB-EGF may mediate the mitogenic effects of steroid hormones in the rat uterus.