Progesterone receptor is a surrogate marker of estrogen receptor activity in breast cancer and its utility in helping predict clinical outcome has been established using biochemical assays. However, most laboratories worldwide have switched to immunohistochemistry to assess progesterone receptor, but unfortunately no validated immunohistochemical assay exists for progesterone receptor. The purpose of this study was to develop and validate an immunohistochemical assay for progesterone receptor in breast cancer. The assay was based on monoclonal antibody 1294 (DakoCytomation) and slides were scored microscopically using the 'Allred score' on a scale of 0-8. The assay was compared to ligand-binding assay in 1235 breast cancers, and a subset (n=362) that received only hormonal therapy was used to define a cutoff for progesterone receptor-positive. Clinical utility was validated in an independent set of samples (n=423) from a clinical trial randomizing premenopausal breast cancer patients to tamoxifen+oophorectomy vs observation following surgery. A cutoff of >2 (corresponding to >1% positive cells) dichotomized patients with significantly better or worse clinical outcome (P=0.0014). Progesterone receptor by immunohistochemistry provided significantly better results than progesterone receptor by ligand-binding assay in predicting clinical outcome. In the clinical trial, a positive result in univariate analyses was associated with significantly improved disease-free and overall survival both in untreated (hazard ratios/P=0.656/0.060 and 0.479/0.005, respectively) and hormonally treated patients (hazard ratios/P=0.529/0.017 and 0.451/0.007, respectively). Positive progesterone receptor remained significant for improved disease-free and overall survival (hazard ratios/P=0.666/0.038 and 0.549/0.007, respectively) in multivariate analyses including the standard variables of tumor size, nodal status, treatment, histological grade, and HER-2/neu status. Estrogen and progesterone receptors are codependent variables and progesterone receptor was a weaker predictor of response to endocrine therapy than estrogen receptor when both were included in multivariate analysis. This is the first comprehensive study assessing the clinical usefulness of progesterone receptor by immunohistochemistry in archival tissue in breast cancer. Progesterone receptor assessed by immunohistochemistry provides useful information about clinical outcome and it is better than progesterone receptor measured by ligand-binding assay.