The secretion of 17 beta-estradiol (E2) and the effect of exogenous E2 on progesterone (P) production by granulosa-luteal cells from 18 women attending an in vitro fertilization (IVF) program were studied. The cells were separated from follicular fluid and precultured in medium containing fetal calf serum. On the third day of culture E2 (0.25-2.0 micrograms/ml) was added onto the cells and its effect on both hCG-stimulated and basal P production was measured. E2 inhibited both basal and hCG-stimulated P production. 1 microgram/ml of E2 caused mean decrements of 55 and 56% in basal and hCG-stimulated P production, respectively. The maximal inhibition by E2 occurred at 6 hours of incubation, but when the cells were allowed to react with E2 for longer periods of time the effect became less significant and more variable. At 48 h no inhibition was observed. At 6 h E2 (1.0 microgram/ml) increased both basal and hCG-stimulated pregnenolone production by approx. 10-fold, suggesting that the suppression of P production was due to inhibition of 3 beta-hydroxysteroid dehydrogenase. Exogenous androgen, 5-Androsten-3 beta-ol-17-one sulfate, dehydroepiandrosterone sulfate (DHEAS), in a dose-dependent manner increased granulosa-luteal cell E2 production. The maximal response was about 1000-fold above the E2 production of unstimulated cells and was not affected by hCG. However, the maximal amount of E2 produced was minor in comparison to exogenous doses required for the suppression of P production and did not have the inhibitory effect. It is concluded that the production of E2 by granulosa-luteal cells is mainly regulated by the availability of androgen substrate, and that E2 functions as a modulator of luteal P production.