Early embryo development following fertilization occurs in the oviduct. However, despite being the site of fertilization in cattle, it is possible to by-pass the oviduct by producing embryos in vitro and/or by transferring blastocysts recovered from one female into the uterus of another. While there is substantial evidence for the oviduct having an influence on the quality of the developing embryo, manifested in altered morphology, gene expression and cryotolerance, evidence for a two-way dialogue is weak. In contrast, successful growth and development of the post-hatching blastocyst and pregnancy establishment are a result of the two-way interaction between a competent embryo and a receptive uterine environment. Progesterone (P4) plays a key role in reproductive events associated with establishment and maintenance of pregnancy through its action on the uterine endometrium. Elevated concentrations of circulating P4 in the immediate post-conception period have been associated with an advancement of conceptus elongation, an increase in interferon-tau production and, in some studies, higher pregnancy rates in cattle. This review summarizes current knowledge on the communication between the developing embryo and the maternal reproductive tract.