Upon breaching of the endometrial surface epithelium, the implanting embryo embeds in the decidualizing stroma. Retinoic acid (RA), a metabolite of vitamin A, is an important morphogen during embryonic and fetal development, although the role of the RA pathway in the surrounding decidual cells is not understood. Here we show that decidual transformation of human endometrial stromal cells (HESCs) results in profound reprogramming of the RA signaling and metabolism pathways. Differentiating HESCs downregulate the intracellular carrier proteins CRABP2 and FABP5, responsible for transfer and binding of RA to the nuclear receptors RAR and PPARβ/δ, respectively. Furthermore, the expression of RAR, the receptor that mediates the pro-apoptotic effects of RA, was also inhibited. By contrast, PPARβ/δ, which transduces the differentiation responses of RA, was upregulated. Decidualization was also associated with increased expression of retinol-binding protein 4 (RBP4) and various enzymes involved in the metabolism of RA and its precursor, retinaldehyde (Rald), including CYP26A1, DHRS3, and RDH12. Exposure of differentiating HESCs to RA or Rald reversed the inhibition of the CRABP2-RAR pathway, perturbed the expression of decidual marker genes and triggered cell death. Taken together, the data demonstrate that decidualizing HESCs silence RA signaling by downregulating key cytoplasmic binding proteins and by increasing retinoid metabolism. However, excessive RA exposure is toxic for decidual cells and triggers a response that may lead to pregnancy failure.