Because of rapid growth followed by spontaneous regression, the ovarian corpus luteum (CL) is an excellent model to study angiogenesis in vivo. To evaluate the expression of vascular endothelial growth factor (VEGF) protein during luteal development, ovaries were collected from FSH-stimulated ewes throughout the estrous cycle. VEGF was immunolocalized in tissue sections by using an affinity-purified antibody. VEGF protein localized exclusively to the thecal layer of preovulatory follicles, while the granulosa was devoid of staining. Associated with the periovulatory period was intense expression of VEGF by thecal cells at the basement membrane and subsequent invasion of the granulosa layers by these VEGF-positive cells immediately after ovulation. The early CL showed staining for VEGF in thecal-derived compartments, and strong staining for VEGF was also seen in cells within the granulosa-derived parenchymal lobules. Dual immunohistochemical localization of VEGF and smooth muscle cell α-actin indicated that the VEGF-positive cells were capillary pericytes or vascular smooth muscle cells. In another experiment, we quantified proliferation of endothelial cells and pericytes throughout luteal development. Pericytes represented a large proportion of the proliferating cells during the early luteal phase and then decreased dramatically. Perivascular cells, therefore, may play a critical role in angiogenesis that occurs during transformation of the follicle into the highly vascular CL of the sheep. As angiogenesis occurs only at the level of capillaries, and pericytes are integral members of these microvessels, regulation of pericytes may provide a novel mechanism for regulating luteal growth and tissue growth in general.