Follicle-stimulating hormone, activin A, and transforming growth factor (TGF) α are important regulators of chicken granulosa cell (cGC) function. Hence, we aimed to test whether these growth factors are useful for establishing a suitable in vitro cell culture model system of primary cGC. Although cGC are easily isolated from distinct follicular stages, a long-term cGC culture system for in vitro studies has been unavailable. Here, we report a novel, long-term cell culture system that allows for cGC proliferation in vitro while maintaining the epithelial phenotype that granulosa cells exhibit in vivo. The cGC rapidly lose their epithelial morphology and acquire a mesenchymal or fibroblastoid phenotype when cultured in the absence of activin A. This process is strongly enhanced by TGFα, a well-known granulosa cell mitogen. However, FSH stimulates cGC proliferation without enhancing morphological changes and dedifferentiation. Interestingly, a combination of both activin A and FSH stimulates cGC proliferation and supports maintenance of differentiated epithelial morphology. Furthermore, activin A and FSH synergistically induce granulosa cell-specific differentiation markers such as inhibin α and chicken zona pellucida protein C, suggesting that cultured cGC resemble functionally differentiated granulosa cells. Our data demonstrate that activin signaling is necessary to sustain a morphologically differentiated phenotype of cGC in vitro. The results also suggest a pivotal importance of activin signaling for granulosa cell function in vivo.