The signal initiating ovarian theca cell (TC) differentiation is gonadotropin independent because theca precursor cells do not contain LH receptors. Previously we demonstrated that preantral follicles produce paracrine TC differentiating factors that promote androgen production by an LH-independent mechanism. This study tested the effects of two granulosa cell-produced peptides, insulin-like growth factor-I (IGF-I) and stem cell factor (SCF), on TC differentiation and androgen production. Neutralizing antibodies to either IGF-I or SCF blocked the stimulatory effects of follicle-conditioned medium on TC precursor differentiation more than 90%. The TC isolated from the ovaries of hypophysectomized immature rats by percoll gradient centrifugation were cultured (48 h) with and without SCF (0–100 ng/ml) and IGF-I (0–100 ng/ml) to test their effects on TC differentiation. Androsterone in the medium was measured by RIA. Luteinizing hormone receptor, steroidogenesis acute regulatory protein (StAR), CYP11A, CYP17, and 3β-hydroxysteroid dehydrogenase (3β-HSD) mRNAs were measured by specific reverse transcriptase polymerase chain reaction assays. Stem cell factor or IGF-I alone did not stimulate androsterone production but in combination caused a concentration-dependent increase in androsterone levels. Maximum androsterone levels were less than those stimulated by LH (0.1 ng/ml) alone. Although IGF-I synergistically augmented LH stimulation of androsterone production, SCF did not alter LH-stimulated androsterone production in the presence or absence of IGF-I. Stem cell factor alone had no effect on LH receptor, StAR, CYP11A, and 3β-HSD mRNA expression but decreased CYP17 mRNA levels. Insulin-like growth factor-I alone had no effect on StAR or CYP17 mRNA expression but increased LH receptor, CYP11A, and 3β-HSD mRNA levels. In combination, SCF plus IGF-I increased the expression of all five mRNAs. These data support the conclusion that IGF-I and SCF are important regulators of TC differentiation.