Leucine-rich repeat-containing G-protein-coupled receptor 5 (Lgr5) is expressed in many organs, including female reproductive organs, and is a stem cell marker in the stomach and intestinal epithelium, hair follicles, and ovarian surface epithelium. Despite ongoing studies, the definitive physiological functions of Lgr5 remain unclear. We utilized mice with conditional deletion of Lgr5 (Lgr5(d/d)) in the female reproductive organs by progesterone receptor-Cre (Pgr(Cre)) to determine Lgr5's functions during pregnancy. Only 30% of plugged Lgr5(d/d) females delivered live pups, and their litter sizes were lower. We found that pregnancy failure in Lgr5(d/d) females was due to insufficient ovarian progesterone (P4) secretion that compromised decidualization, terminating pregnancy. The drop in P4 levels was reflected in elevated levels of P4-metabolizing enzyme 20α-hydroxysteroid dehydrogenase in corpora lutea (CL) inactivated of Lgr5. Of interest, P4 supplementation rescued decidualization failure and supported pregnancy to full term in Lgr5(d/d) females. These results provide strong evidence that Lgr5 is critical to normal CL function, unveiling a new role of LGR5 in the ovary.