Decidualization denotes the transformation of endometrial stromal fibroblasts into specialized secretory decidual cells that provide a nutritive and immunoprivileged matrix essential for embryo implantation and placental development. In contrast to most mammals, decidualization of the human endometrium does not require embryo implantation. Instead, this process is driven by the postovulatory rise in progesterone levels and increasing local cAMP production. In response to falling progesterone levels, spontaneous decidualization causes menstrual shedding and cyclic regeneration of the endometrium. A growing body of evidence indicates that the shift from embryonic to maternal control of the decidual process represents a pivotal evolutionary adaptation to the challenge posed by invasive and chromosomally diverse human embryos. This concept is predicated on the ability of decidualizing stromal cells to respond to individual embryos in a manner that either promotes implantation and further development or facilitates early rejection. Furthermore, menstruation and cyclic regeneration involves stem cell recruitment and renders the endometrium intrinsically capable of adapting its decidual response to maximize reproductive success. Here we review the endocrine, paracrine, and autocrine cues that tightly govern this differentiation process. In response to activation of various signaling pathways and genome-wide chromatin remodeling, evolutionarily conserved transcriptional factors gain access to the decidua-specific regulatory circuitry. Once initiated, the decidual process is poised to transit through distinct phenotypic phases that underpin endometrial receptivity, embryo selection, and, ultimately, resolution of pregnancy. We discuss how disorders that subvert the programming, initiation, or progression of decidualization compromise reproductive health and predispose for pregnancy failure.