Müllerian inhibitory substance (MIS), also known as anti-Müllerian hormone, is best known as the hormone that regulates the regression of the Müllerian duct in males. In females, MIS is expressed in granulosa cells of preantral and early antral follicles. The specific MIS type II receptor is present in granulosa and theca cells of these small, growing follicles. Because the role of MIS in preantral follicle development is unknown, we have evaluated the effect of MIS on the growth, differentiation, and apoptosis of intact preantral follicles in a serum-free culture system. In this system, treatment with FSH induces an increase in both follicle diameter, cell number, and follicle cell differentiation based on increased inhibin-α synthesis. Of interest, treatment with MIS enhances the effect of FSH both on follicle diameter and cell number. Although treatment with activin A also enhances FSH effects on follicle growth, treatment with transforming growth factor (TGF)-β inhibits the FSH effects on follicle growth. Based on in situ staining of fragmented DNA, MIS was found to have no effect on follicle cell apoptosis, unlike its proapoptotic action on Müllerian ducts. In contrast to MIS and activin, TGF-β was a potent proapoptotic factor for preantral follicles in culture. Analysis of inhibin-α expression of cultured preantral follicles further indicated that in contrast to activin, treatment with MIS did not enhance FSH-stimulated follicle differentiation. Thus, MIS is a unique factor that promotes preantral follicle growth but not preantral follicle cell differentiation and apoptosis.