Decidualization denotes the differentiation of endometrial stromal cells into specialized decidual cells, essential for embryo implantation and pregnancy. The process requires coordination of progesterone and cAMP signaling, which converge on downstream transcription factors. PGE2 and relaxin, acting, respectively, through Gαs-coupled GPCRs EP2 and RXFP1, are putative candidates for generating cAMP in differentiating stromal cells. Here, we show that PGE2 is less efficacious than relaxin in elevating intracellular cAMP levels in primary stromal cells but more effective at driving the expression of decidual genes. PGE2-and relaxin-induced cAMP generation involves receptor internalization, but EP2 is endocytosed into very early endosomes (VEEs). Perturbation of VEE machinery through depletion of key trafficking proteins; APPL1 and GIPC, dysregulates PGE2-dependent cAMP profiles and disrupts key decidual signaling pathways, resulting in a disordered differentiation response. We demonstrate that regulation of EP2 via internalization is essential for coordinated activation of the downstream signaling cascades that govern decidualization.