The human progesterone receptor (PR) exists in two major forms, PRA and PRB, which differentially regulate gene transcription in a cell- and promoter-specific manner. The molecular mechanisms underlying this differential transcriptional activity have been attributed to the presence of a unique AF3 domain within PRB that may result in the two isoforms adopting different protein conformations. We demonstrate here that in myometrial cells, PRB exhibits strong progesterone-dependent transcriptional activity that is dependent on the presence of two LXXLL motifs within the AF3 domain. In vitro and in vivo protein interaction assays indicate that these motifs mediate the direct interaction between the AF3 domain and C-PR in a progesterone-dependent manner. Mutation of either of the LXXLL motifs or deletion of the last 30 amino acids within the C-terminus disrupts this interaction and progesterone-dependent transcriptional activity of PRB. Members of the p160 family of co-activators (such as GRIP-1) also interact with C-PR through their LXXLL motifs. However, GRIP-1 does not compete with AF3 but rather acts to synergize these two transactivation domains. Our data suggest that a failure to form an appropriate AF3-C-terminus interaction results in an inability of co-activators to induce maximal PR-dependent transactivation. The absence of an AF3 domain within PRA may account for its inability to activate progesterone-responsive genes, as well as its actions as a dominant trans-repressor.