Messenger RNA for peroxisome proliferator-activated receptor γ (PPARγ) has been found in granulosa cells, and its expression decreases after the LH surge. We determined which developmental stage of ovarian follicle expresses mRNA for PPARγ and evaluated the impact of PPARγ agonists on steroidogenesis. Ovaries were collected from immature eCG/hCG-treated rats at 0 (no eCG), 24, and 48 h post-eCG and 4 and 24 h post-hCG. Ovarian tissue was serially sectioned and processed for in situ hybridization to localize mRNA corresponding to PPARγ, aromatase, and the LH receptor, and P450 side chain cleavage (P450_SCC) and to determine whether apoptotic cells were present. During follicular development, there was no correlation between the expression of mRNAs for PPARγ and aromatase or the presence of apoptotic cells, but a general inverse correlation was observed between the expression of PPARγ mRNA and LH receptor mRNA. At 4 h post-hCG, follicles expressing P450_SCC mRNA had lost expression of PPARγ mRNA. This inverse pattern of expression between PPARγ and P450_SCC mRNAs was also observed 24 h post-hCG, with developing luteal tissue expressing high levels of P450_SCC mRNA but little or no PPARγ mRNA. To determine the impact of PPARγ on steroidogenesis, granulosa cells were collected from ovaries 24 h post-eCG and cultured alone, with FSH alone, or with FSH in combination with the PPARγ agonists ciglitazone or 15-deoxy-Δ^12,14-prostaglandin J₂ (PGJ₂). Treatment of granulosa cells with PGJ₂ stimulated basal progesterone secretion, whereas ciglitazone or PGJ₂ had no significant effect on FSH-stimulated steroid production. These findings suggest that 1) PPARγ may regulate genes involved with follicular differentiation and 2) the decline in PPARγ in response to LH is important for ovulation and/or luteinization.