Cumulus cells and mural granulosa cells (MGC) are phenotypically different and there is now evidence suggesting that the oocyte plays an active role in determining the fate of follicular somatic cells. This study investigates the role of oocyte-secreted factor(s) in the regulation of the growth and differentiation of cumulus and MGC. Bovine cumulus-oocyte complexes (COC) and MGC were cultured with various hormones for 18 h followed by a further 6-h pulse of [³H]thymidine as an indicator of follicular cell DNA synthesis. The COC incorporated 11 to 14 times more [³H]thymidine than MGC in either the absence or presence of 50 ng/ml insulin-like growth factor (IGF)-I. Purified porcine FSH (450 ng/ml) added together with IGF-I marginally increased ³H incorporation in MGC relative to IGF-I alone but dramatically decreased incorporation in COC sixfold. Conversely, mean progesterone production in the presence of IGF-I FSH was 13-fold higher from MGC than from COC, confirming a distinctive phenotype of cumulus cells. However, this phenotype was found to be dependent on the presence of the oocyte, as microsurgical removal of the oocyte (oocytectomy) resulted in an 11-fold decrease in [³H]thymidine incorporation in cumulus cells treated with IGF-I, elimination of the inhibitory effect of FSH on IGF-I-stimulated DNA synthesis, and led to a 2-fold increase in progesterone production in medium with IGF-I and FSH. All of these markers were completely restored to COC levels when oocytectomized complexes were cocultured with denuded oocytes (DO) at a concentration of 0.5 oocytes/μl, demonstrating that oocytes secrete a soluble factor(s) that promotes growth and attenuates cumulus cell progesterone secretion. In the presence of IGF-I, [³H]thymidine incorporation in MGC increased ninefold above control levels with the addition of DO. The addition of FSH to IGF-I-increased ³H counts in MGC, however, led to a decrease in counts in MGC DO as is also observed in COC. Furthermore, progesterone production was halved when DO were added to MGC cultures, most notably in the presence of IGF-I and/or FSH. These results provide further evidence that MGC and cumulus cells have distinctive phenotypes and that the oocyte is responsible for some of the characteristic features of cumulus cells. Bovine oocytes secrete a soluble factor(s) that simultaneously promotes growth and attenuates steroidogenesis in follicular somatic cells.