Allopregnanolone (3α-THP) has been one of the most studied progesterone metabolites for decades. 3α-THP and its synthetic analogs have been evaluated as therapeutic agents for pathologies such as anxiety and depression. Enzymes involved in the metabolism of 3α-THP are expressed in classical and nonclassical steroidogenic tissues. Additionally, due to its chemical structure, 3α-THP presents high affinity and agonist activity for nuclear and membrane receptors of neuroactive steroids and neurotransmitters, such as the Pregnane X Receptor (PXR), membrane progesterone receptors (mPR) and the ionotropic GABA receptor, among others. 3α-THP has immunomodulator and antiapoptotic properties. It also induces cell proliferation and migration, all of which are critical processes involved in cancer progression. Recently the study of 3α-THP has indicated that low physiological concentrations of this metabolite induce the progression of several types of cancer, such as breast, ovarian, and glioblastoma, while high concentrations inhibit it. In this review, we explore current knowledge on the metabolism and mechanisms of action of 3α-THP in normal and tumor cells.