Progesterone induces decidual transformation of estrogen-primed human endometrial stromal cells (hESCs), critical for implantation and maintenance of pregnancy, through activation of many signaling pathways involving protein kinase A and STAT5. We have previously shown that activation of SRC kinase is closely associated with decidualization and that SRC is indispensable for maximal decidualization in mice. To address whether SRC kinase activity is essential for decidualization in humans, hESCs were infected with adenoviruses carrying EGFP alone (Ad-EGFP), a kinase-inactive dominant negative mutant (Ad-SRC/K295R), or an inactive autophosphorylation site mutant (Ad-SRC/Y416F). The cells were cultured in the presence of estradiol and progesterone (EP) to induce decidualization, and subjected to RT-PCR, immunoblot, and ELISA analyses. Ad-EGFP-infected hESCs exhibited decidual transformation and up-regulation of decidualization markers including IGF binding protein 1 (IGFBP1) and prolactin in response to 12-day treatment with EP. In contrast, hESCs infected with Ad-SRC/K295R remained morphologically fibroblastoid without production of IGFBP1 and prolactin even after EP treatment. Ad-SRC/Y416F displayed similar but less inhibitory effects on decidualization compared to Ad-SRC/K295R. During decidualization, STAT5 was phosphorylated on tyrosine 694, a well-known SRC phosphorylation site. Phosphorylation was markedly attenuated by Ad-SRC/K295R, but not Ad-EGFP. These results indicate that the SRC-STAT5 pathway is essential for decidualization of hESCs.