A factorial experiment was conducted to determine influence of energy balance (EB) and body condition (BC) on luteal function in heifers. Heifers with moderate (MBC) or fat (FBC) BC were fed individually to sustain positive EB (PEB) or to cause negative EB (NEB). Intake of feed was measured daily and body weight weekly. Progesterone was quantified daily in serum for 3.5 estrous cycles. On days 9, 10, or 11 after fourth estrus, blood was sampled every 15 min for 12 hr to quantify luteinizing hormone (LH), growth hormone (GH), insulin and non-esterified fatty acids (NEFA). The next day, luteal cells were incubated and proportions of small to large cells were determined. After fourth estrus, area of progesterone profiles in serum for 10 days postestrus was reduced in all heifers relative to MBC-PEB heifers. But, luteal weight from FBC-PEB and MBC-NEB heifers was less than MBC-PEB heifers and FBC-NEB heifers were intermediate. Secretion of progesterone in vitro was increased by LH for PEB but not NEB heifers. MBC-NEB heifers had increased ratios of small to large luteal cells. Independent of BC, NEB decreased concentrations of insulin and increased GH and NEFA. Secretion of progesterone was not associated with LH, GH or insulin, but was correlated negatively with NEFA. We conclude that reduced concentrations of progesterone in serum of FBC-PEB and MBC-NEB heifers is due to impaired luteal development. But, reduced concentrations of progesterone in serum of NEB heifers is due also to reduced basal (MBC) and LH-induced (MBC and FBC) secretion of progesterone by luteal cells. Body condition at onset of NEB may determine when effects of NEB on progesterone are detected.