Transcriptional regulation of the prolactin gene in the decidua differs from that in the pituitary. Several lines of evidence strongly suggest this difference is due to regulation of the prolactin gene in the decidua and other extra-pituitary tissues by tissue-specific transcription factors, which activate distinct promoters to induce prolactin gene expression in extra-pituitary sites compared with the pituitary. The human decidua is a major site of extra-pituitary expression of the prolactin gene. Here we present evidence that the transcription factor Ets-1 is critical for basal expression of the decidua-type (or decidual) prolactin promoter. Overexpression of Ets-1 significantly induces decidual prolactin promoter activity in BeWo and JAR cells that express little or no endogenous Ets-1. Conversely, a dominant/negative mutant of Ets represses basal promoter activity. Although the proximal 1.5 kb of the decidual prolactin promoter contains six Ets motifs, only the Ets motif at nt -77/-71 is essential for basal gene expression. Mutation of the Ets motif at nt -77/-71 results in an approximately 90% decrease in promoter activity, while mutation of the other Ets motifs results in only small changes. Electrophoretic mobility shift assays demonstrate that Ets proteins in decidualized endometrial stromal cells bind this Ets motif in the decidual prolactin promoter. Ets protein expression increases up to 20-fold upon induction of decidualization in endometrial stromal cells under conditions in which expression of the prolactin gene is also induced. These studies provide strong evidence for a critical role of the Ets transcription factor in basal expression of the decidual prolactin promoter.