Implantation is an essential process during establishment of pregnancy in mammals. It is initiated with the attachment of the blastocyst to a receptive uterine epithelium followed by its invasion into the stromal tissue. These events are profoundly regulated by the steroid hormones 17β-estradiol and progesterone. During the past several years, mouse models harboring conditional gene knockout mutations have become powerful tools for determining the functional roles of cellular factors involved in various aspects of implantation biology. Studies using these genetic models as well as primary cultures of human endometrial cells have established that the estrogen receptor α, the progesterone receptor, and their downstream target genes critically regulate uterine growth and differentiation, which in turn control embryo-endometrial interactions during early pregnancy. These studies have uncovered a diverse array of molecular cues, which are produced under the influence of estrogen receptor α and progesterone receptor and exchanged between the epithelial and stromal compartments of the uterus during the progressive phases of implantation. These paracrine signals are critical for acquisition of uterine receptivity and functional interactions with the embryo. This review highlights recent work describing paracrine mechanisms that govern steroid-regulated uterine epithelial-stromal dialogue during implantation and their roles in fertility and disease.