The germinal disc (GD) of the chicken oocyte produces factors that influence proliferation and differentiation of granulosa cells. Granulosa cells proximal to the GD are more proliferative, whereas granulosa cells distal to the GD are more differentiated. Previously, we had found epidermal growth factor (EGF) was present in the GD. In this study, we tested the hypothesis that EGF is the GD-derived paracrine factor that stimulates proliferation of granulosa cells. Northern analysis, reverse transcription-polymerase chain reaction, and radioimmunoassay indicated that the GD and granulosa cells but not theca cells are the sources of EGF in chicken preovulatory follicles. However, only the conditioned medium from the GD region (GDR = GD overlying granulosa cells) but not the granulosa cell-conditioned medium stimulated proliferation of granulosa cells. Pretreatment of conditioned media with EGF antibody abolished the proliferation-stimulating effect of the GDR-conditioned medium. We conclude that EGF is one of the paracrine factors produced by the GD to stimulate proliferation of granulosa cells. Granulosa cells proximal to the GD express a proliferative phenotype possibly because they are exposed to a greater amount of EGF derived from the GD.