Well-timed progression of primordial folliculogenesis is essential for mammalian female fertility. Progesterone (P4) inhibits primordial follicle formation under physiological conditions; however, P4 receptor that mediates this effect and its underlying mechanisms are unclear. In this study, we used an in vitro organ culture system to show that progesterone receptor membrane component 1 (PGRMC1) mediated P4-induced inhibition of oocyte meiotic prophase I and primordial follicle formation. We found that membrane-impermeable BSA-conjugated P4 inhibited primordial follicle formation similar to that by P4. Interestingly, PGRMC1 and its partner serpine1 mRNA-binding protein 1 were highly expressed in oocytes in perinatal ovaries. Inhibition or RNA interference of PGRMC1 abolished the suppressive effect of P4 on follicle formation. Furthermore, P4-PGRMC1 interaction blocked oocyte meiotic progression and decreased intra-oocyte cyclic AMP (cAMP) levels in perinatal ovaries. cAMP analog dibutyryl cAMP reversed P4-PGRMC1 interaction-induced inhibition of meiotic progression and follicle formation. Thus, our results indicated that PGRMC1 mediated P4-induced suppression of oocyte meiotic progression and primordial folliculogenesis by decreasing intra-oocyte cAMP levels.