The progesterone receptor (PR) is a critical mediator of progesterone action in the female reproductive system. Expressed in the human as two proteins, PRA and PRB, the receptor is a ligand-activated nuclear transcription factor that regulates transcription by interaction with protein co-factors and binding to specific response elements in target genes. We previously reported that PR was located in discrete subnuclear foci in human endometrium. In this study we investigated the role of ligand in the formation of PR foci and their association with transcriptional activity. PR foci were detected in mouse uterus and in normal human breast tissues, and were more abundant when circulating progesterone was high. In human malignant tissues PR foci were aberrant: foci were larger in endometrial cancers than in normal endometrium, and in breast cancers hormone-dependence was decreased. Chromatin disruption also increased foci size and decreased ligand-dependence, suggesting that altered nuclear architecture may contribute to the aberrant PR foci observed in endometrial and breast cancers. In breast cancer cells movement of PR into foci required exposure to ligand, and was blocked by transcriptional inhibitors, and by prolonged inhibition of proteasomal degradation. Foci contained PR dimers, and fluorescence resonance energy transfer demonstrated that PR foci contained the highest concentration of receptor dimers in the nucleus. PR in foci co-localized with transcription factors and nascent RNA transcripts only in the presence of ligand, and inhibition of co-activator recruitment inhibited PR foci formation. The demonstration that focal distribution of PR within the nucleus is associated with transcription suggests a link between the subnuclear distribution of PR and its transcriptional activity that is likely to be important for normal cellular function of PR.