Decidualization of endometrium, which is characterized by endometrial stromal cell (ESC) decidualization, vascular reconstruction, immune cell recruitment, and plentiful molecule production, is a crucial step for uterus to become receptive for embryo. When implantation takes place, ESCs surround and directly interact with embryo. Decidualized stromal cells (DSCs) are of great importance in endometrial decidualization, having a broad function in regulating immune activity and vascular remodeling of uterus. DSCs are shown to have a higher metabolic level and looser cytoskeleton than ESCs. What's the origin of ESCs and how ESCs successfully transform into DSCs had puzzled scientists in the last decades. Breakthrough had been achieved recently, and many studies had elucidated some of the characters and functions of DSCs. However, several questions still remain unclear. This paper reviews current understanding of where ESCs come from and how ESCs differentiate into DSCs, summarizes some characters and functions of DSCs, analyzes current studies and their limitations and points out research areas that need further investigation.