We have demonstrated previously that cyclo-oxygenase-2 (COX2), the rate-limiting enzyme in the biosynthesis of prostaglandins (PGs), is essential for blastocyst implantation and decidualization. However, the candidate PG(s) that participates in these processes and the mechanism of its action remain undefined. Using COX2-deficient mice and multiple approaches, we demonstrate herein that COX2-derived prostacyclin (PGI₂) is the primary PG that is essential for implantation and decidualization. Several lines of evidence suggest that the effects of PGI₂ are mediated by its activation of the nuclear hormone receptor PPARδ, demonstrating the first reported biologic function of this receptor signaling pathway.