The in vitro expansion is detrimental to therapeutic applications of amniotic epithelial cells (AEC), an emerging source of fetal stem cells. This study provides molecular evidences of progesterone (P 4) role in preventing epithelial-mesenchymal transition (EMT) in ovine AEC (oAEC). oAEC amplified under standard conditions spontaneously acquired mesenchymal properties through the up-regulation of EMT-transcription factors. P 4 supplementation prevented phenotype shift by inhibiting the EMT-inducing mechanism such as the autocrine production of TGF-β and the activation of intracellular-related signaling. The effect of P 4 still persisted for one passage after steroid removal from culture as well as steroid supplementation promptly reversed mesenchymal phenotype in oAEC which have experienced EMT during amplification. Furthermore, P 4 promoted an acute up-regulation of pluripotent genes whereas enhanced basal and LPS-induced oAEC anti-inflammatory response with an increase in anti-inflammatory and a decrease in pro-inflammatory cytokines expression. Altogether, these results indicate that P 4 supplementation is crucial to preserve epithelial phenotype and to enhance biological properties in expanded oAEC. Therefore, an innovative cultural approach is proposed in order to improve therapeutic potential of this promising source of epithelial stem cells.