Granulosa cell formation and subsequent follicular assembly are important for ovarian development and function. Two members of the GATA family of transcription factors, GATA4 and GATA6, are expressed in ovarian somatic cells early in development, and their importance in adult ovarian function has been recently highlighted. In this study, we demonstrated that the embryonic loss of Gata4 and Gata6 expression within the ovary results in a strong down-regulation of genes involved in the ovarian developmental pathway (Fst and Irx3) as well as diminished expression of the pregranulosa and granulosa cell markers SPRR2 and FOXL2, respectively. Postnatal ovaries deficient in both Gata genes show impaired somatic cell proliferation and arrested follicular development at the primordial stage, where oocytes are either enclosed by one layer of squamous granulosa cells or remain in germ cell nests/clusters. Furthermore, germ cell nests and primordial follicles are predominantly localized to the central region of the Sf1Cre; Gata4^flox/flox Gata6^flox/flox ovaries, where the boundary between the medulla and cortex is almost nonexistent. Lastly, most of the oocytes are lost early in development in conditional double mutant ovaries, which confirms the importance of normally differentiated granulosa cells as supporting cells for oocyte survival. Thus, both GATA4 and GATA6 proteins are fundamental regulators of granulosa cell differentiation and proliferation, and consequently of proper follicular assembly during normal ovarian development and function.