Progesterone is an important regulator of growth and differentiation in breast tissues. In this study, the effect of progesterone on cell differentiation was evaluated in the estrogen receptor-negative and progesterone receptor (PR)-negative MDA-MB-231 cell line which was transfected with PR-complementary DNA. Morphological changes were analyzed at the ultrastructural level by scanning and transmission electron microscopy. Progesterone-treated PR-transfected cells exhibited a more protracted and well spread morphology with an increase in organelles such as mitochondria and rough endoplasmic reticulum as compared to the rounded form of control vehicle (0.1% ethanol)-treated PR-transfected cells. Vehicle and progesterone-treated MDA-MB-231 cells transfected with the pSG5 plasmid (transfection control cells) had similar rounded morphology as control vehicle-treated PR-transfected cells. Immunofluorescence staining revealed that expression of E-cadherin, a differentiation marker, was more prominent in progesterone-treated cells. Expression of keratin and vimentin but not beta-catenin was up-regulated in progesterone treated cells when evaluated by immunoblotting. As signal transducers and activators of transcription (STAT) molecules have been implicated in mammary differentiation, we analyzed the expression of Stat 1, 3, 5a, and 5b proteins and found a significant up-regulation of the Stat 5b protein in progesterone-treated cells. We have provided in vitro evidence of the close association of PR with differentiation in breast cancer. It is likely that the Stat 5b protein may play a major role in progesterone-induced differentiation in breast cancer cells.