During the development of oocyte-granulosa cell complexes from preantral follicles in vitro, oocytes grow and acquire competence to undergo germinal vesicle breakdown (GVB). In the culture system used here, GVB-competent oocytes were maintained in meiotic arrest solely by endogenous physiological mechanisms of the granulosa cells without supplementation with meiosis-arresting substances. Addition of mycophenolic acid, an inhibitor of inosine monophosphate (IMP) dehydrogenase, induced GVB in about 70% of the GVB-competent oocytes grown in vitro. The mechanism for meiotic arrest in this system is, therefore, similar to that for arrest in vivo insofar as it requires the participation of the IMP dehydrogenase pathway. Rp-cyclic adenosine monophosphothioate, a membrane-permeable antagonist to cAMP, induced GVB by about 30% of the competent oocytes. Cyclic AMP-dependent pathways, therefore, participate in the physiological mechanism by which mouse granulosa cells maintain meiotic arrest. Complexes were grown for 10 days in medium containing 0, 1, 5, or 10 ng/ml FSH, were stimulated with either 1 microgram/ml FSH or LH, and were assessed for GVB and cumulus expansion. GVB was stimulated by FSH whether or not the complexes were grown in medium containing FSH, but LH or hCG induced GVB only when the complexes were grown in medium containing FSH. Cumulus expansion occurred in response to either FSH or LH only when complexes were grown in medium containing FSH. FSH, therefore, promotes the differentiation of granulosa cells from preantral follicles in vitro so that LH can stimulate GVB and cumulus expansion.