From kellymom.com:
The specter of breastfeeding-induced preterm labor appears to spring in large part from an incomplete understanding of the interactions between nipple stimulation, oxytocin, and pregnancy.
The first little-known fact is that during pregnancy less oxytocin is released in response to nipple stimulation than when a woman is not pregnant.5
But the key to understanding breastfeeding during pregnancy is the uterus itself. Contrary to popular belief, the uterus is not at the beck and call of oxytocin during the 38 weeks of the “preterm” period. Even a high dose of synthetic oxytocin (Pitocin) is unlikely to trigger labor until a woman is at term.6
Instead, the uterus must actively prepare in order for labor to commence. You could say that there are two separate states of being for the uterus: the quiescent baby-holder and the active baby-birther. These states make all the difference to how the uterus responds to oxytocin, and so, one can surmise, to breastfeeding. While the baby is growing, the uterus is geared to have a muffled response to oxytocin; at term, the body’s preparations for labor transform the uterus in ways that make it respond intensely to oxytocin.
Many discussions of breastfeeding during pregnancy mention “oxytocin receptor sites,” the uterine cells that detect the presence of oxytocin and cause a contraction. These cells are sparse up until 38 weeks, increasing gradually after that time, and increasing 300-fold after labor has begun.6,7 The relative scarcity of oxytocin receptor sites is one of the main lines of defense for keeping the uterus quiescent throughout the entire preterm period—but it is not the only one.
A closer look at the molecular biology of the pregnant uterus reveals yet more lines of defense. In order for oxytocin receptor sites to respond strongly to oxytocin they need the help of special agents called “gap junction proteins”. The absence of these proteins renders the uterus “down-regulated,” relatively insensitive to oxytocin even when the oxytocin receptor site density is high. And natural oxytocin-blockers, most notably progesterone, stand between oxytocin and its receptor site throughout pregnancy. 8,9,10
With the oxytocin receptor sites (1) sparse, (2) down-regulated, and (3) blocked by progesterone and other anti-oxytocin agents, oxytocin alone cannot trigger labor. The uterus is in baby-holding mode, well protected from untimely labor.4