Endometriosis is a common, complex gynecologic disorder characterized by the presence of endometrial glands and stroma at extrauterine (ectopic) sites. In women who develop this disease, alterations in specific biological processes involving both the endocrine and immune systems have been observed, which may explain the survival and growth of displaced endometrial tissue in affected women. In the past decade, a considerable amount of research has implicated a role for alterations in progesterone action at both eutopic and ectopic sites of endometrial growth which may contribute to the excessive inflammation associated with progression of endometriosis; however, it remains unclear whether these anomalies induce the condition or are simply a consequence of the disease process. In this article, we summarize current knowledge of alterations within the immune system of endometriosis patients and discuss how endometrial cells from women with this disease not only have the capacity to escape immunosurveillance, but also use inflammatory mechanisms to promote their growth within the peritoneal cavity. Finally, we discuss evidence that exposure to an environmental endocrine disruptor, such as 2,3,7,8-tetrachlorodibenzo-p-dioxin, can mediate the development of an endometrial phenotype that exhibits both reduced progesterone responsiveness and hypersensitivity to proinflammatory stimuli mimicking the endometriosis phenotype. Future studies in women with endometriosis should consider whether a heightened inflammatory response within the peritoneal microenvironment contributes to the development and persistence of this disease.