Progesterone (PG) is a crucial immunomodulatory agent during early pregnancy, and nowadays PG oil-based injection (PG/OI) has a huge market all over the world. However, PG/OI may accumulate the local muscle and further cause irritations after long-term administration. In this study, PG nanocrystals (PG/NCs) injection was developed to decrease muscle toxicity. PG/NCs injection containing 10% (w/v) PG was first prepared using a wet grinding method. Then, particle size, zeta potential, morphology powder, X-ray diffraction (PXRD), differential scanning calorimetry (DSC), and Fourier transform infrared (FTIR) studies were carried out to evaluate the characteristics of dosage form. The rabbit muscle irritation, hemolysis, and rat pharmacokinetics tests were used to estimate the in vivo characteristics of PG/NCs. The results showed that the mean particle size and the zeta potentials of NCs were 299.5 ± 9.0 nm and − 36.8 ± 1.5 mV, respectively. The crystalline state of PG/NCs was not altered during particle size reduction according to PXRD, DSC, and FTIR results. Muscle irritation presented that PG/NCs had lower irritation than that of PG/OI. Hemolysis test suggested that PG/NCs injection was functioned without hemolysis and red cell agglutination. The pharmacokinetics study showed that the AUC0–t and Cmax of PG/NCs was 3.2-fold (p < 0.05) and 3.1-fold higher than PG/OI, which demonstrated that PG/NCs injection had greater bioavailability than PG/OI. Therefore, it was obvious that PG/NCs injection exhibited a lower muscle irritation, hemolysis rate, and higher bioavailability, which was a better dosage form than OI.