Preterm birth is a significant contributor to perinatal morbidity and mortality. Any intervention to effectively decrease the complications of a preterm birth must not only delay or prevent preterm delivery, but also improve neonatal outcomes. Until recently, interventions to prevent preterm birth have been largely unsuccessful. While some interventions are demonstrated to delay delivery for a short interval, the increased latency period does not result in improved neonatal outcomes. Recently, two randomized clinical trials demonstrated that progestational agents may decrease the incidence of preterm birth. As obstetricians, it is critical that we question the biological plausibility of a treatment prior to using it as standard of care. This review will address the physiologic role of progesterone in preterm and term labour, the molecular mechanisms by which progestational agents might exert a biological effect and the possible mechanisms by which these agents may prevent preterm birth.