We have examined whether granulosa cells (GC) secrete transforming growth factor-beta (TGF beta)-like activity using cell cultures prepared from diethylstilbestrol-primed female rats. Our results indicate that a significant level of active as well as latent TGF beta activity is found in defined GC culture medium as assessed by 1) potentiation of FSH-induced differentiation of rat GC, 2) neutralization of its activity by anti-TGF beta immunoglobulin, 3) inhibition of DNA synthesis in mink lung epithelial cells (CCl 64), and 4) activation of latent TGF beta activity by either acid or heat treatment. TGF beta production was more pronounced when the cells were seeded on fibronectin-coated plates. There was no difference in the level of TGF beta secretion by GC preparations derived from either diethylstilbestrol-primed immature or normal immature rats or adult rats. Furthermore, rat GC-conditioned medium contained much more TGF beta activity than medium from normal rat kidney cells (NRK 49-F), human prostatic adenocarcinoma cells (PC-3), or porcine GC. Rat thecal/interstitial cell culture medium contained activity comparable to that of GC medium. We conclude that rat GC preparations secrete a high level of TGF beta activity in vitro. Taken together with previous results, this indicates the possibility that TGF beta may be an autocrine regulator as well as a paracrine one within the ovarian follicle. Moreover, because of the high level of TGF beta activity produced, the rat GC culture system appears to be a useful experimental model for further exploring relationships between TGF beta production and its action.