Recent evidence suggests that the dynorphin-kappa receptor opioid system acts to mediate the inhibitory effect of progesterone (P) on GnRH pulse frequency during the luteal phase of the ovine estrous cycle. It is known that progesterone receptors (PRs) are required for the actions of P on GnRH secretion. Therefore, if P acts directly on dynorphin (DYN) neurons, then these neurons should contain PRs. To test this hypothesis, we used a dual-label immunoperoxidase procedure to visualize PRs and DYN in the preoptic area (POA) and hypothalamus of ovary-intact ewes killed during the luteal phase of the estrous cycle. The PR was colocalized in more than 90% of parvicellular DYN neurons in the POA, anterior hypothalamus (AHA), and arcuate nucleus (ARC). By contrast, none of magnocellular DYN cells of the paraventricular and supraoptic nuclei coexpressed immunoreactive PRs. The high percentage of colocalization of PRs in parvicellular DYN cells of the POA, AHA, and ARC suggests that these cells are prime targets of P. In addition, DYN cells in the ARC, but not the POA or AHA, were found to receive synaptic inputs from DYN-positive axon terminals. This observation raises the possibility that an ultrashort feedback loop controls the release of DYN from ARC neurons.