The objective was to investigate the potential role of the oocyte in modulating proliferation and basal, FSH-induced and insulin-like growth factor (IGF)-induced secretion of inhibin A (inh A), activin A (act A), follistatin (FS), estradiol (E₂), and progesterone (P₄) by mural bovine granulosa cells. Cells from 4- to 6-mm follicles were cultured in serum-free medium containing insulin and androstenedione, and the effects of ovine FSH and IGF analogue (LR3-IGF-1) were tested alone and in the presence of denuded bovine oocytes (2, 8, or 20 per well). Medium was changed every 48 h, cultures were terminated after 144 h, and viable cell number was determined. Results are based on combined data from four independent cultures and are presented for the last time period only when responses were maximal. Both FSH and IGF increased (P < 0.001) secretion of inh A, act A, FS, E₂, and P₄ and raised cell number. In the absence of FSH or IGF, coculture with oocytes had no effect on any of the measured hormones, although cell number was increased up to 1.8-fold (P < 0.0001). Addition of oocytes to FSH-stimulated cells dose-dependently suppressed (P < 0.0001) inh A (6-fold maximum suppression), act A (5.5-fold), FS (3.6-fold), E₂ (4.6-fold), and P₄ (2.4-fold), with suppression increasing with FSH dose. Likewise, oocytes suppressed (P < 0.001) IGF-induced secretion of inh A, act A, FS, and E₂ (P < 0.05) but enhanced IGF-induced P₄ secretion (1.7-fold; P < 0.05). Given the similarity of these oocyte-mediated actions to those we observed previously following epidermal growth factor (EGF) treatment, we used immunocytochemistry to determine whether bovine oocytes express EGF or transforming growth factor (TGF) α. Intense staining with TGFα antibody (but not with EGF antibody) was detected in oocytes both before and after coculture. Experiments involving addition of TGFα to granulosa cells confirmed that the peptide mimicked the effects of oocytes on cell proliferation and on FSH- and IGF-induced hormone secretion. These experiments indicate that bovine oocytes secrete a factor(s) capable of modulating granulosa cell proliferation and responsiveness to FSH and IGF in terms of steroidogenesis and production of inhibin-related peptides, bovine oocytes express TGFα but not EGF, and TGFα is a prime candidate for mediating the actions of oocytes on bovine granulosa cells.