Local estrogen production plays a key role in proliferative endometrial disorders, such as endometrial hyperplasia and cancer. Hydroxysteroid (17beta) dehydrogenase 1 (HSD17B1) is an enzyme that catalyzes with high efficiency the conversion of weakly active estrone into highly potent estradiol. Here we report that female transgenic mice expressing human HSD17B1 invariably develop endometrial hyperplasia in adulthood. These mice also fail to ovulate and have enhanced peripheral conversion of estrone into estradiol in a variety of target tissues, including the uterus. As in humans, endometrial hyperplasia in HSD17B1 transgenic female mice was reversible on ovulation induction, which triggers a rise in circulating progesterone levels, and in response to exogenous progestins. Strikingly, a treatment with an HSD17B1 inhibitor failed to restore ovulation yet completely reversed the hyperplastic morphology of epithelial cells in the glandular compartment, although less so in the luminal epithelium. The data indicate that human HSD17B1 expression enhances endometrial estrogen production, and consequently, estrogen-dependent proliferation. Therefore, HSD17B1 is a promising new therapeutic target in the management of estrogen-dependent endometrial diseases.