Indomethacin blocks ovulation in human chorionic gonadotropin-stimulated rabbits. Experiments were done with an in vitro ovarian perfusion system to investigate whether indomethacin affects luteinization and steroidogenesis. Indomethacin (10 mg/kg) was administered in combination with human chorionic gonadotropin (100 IU) via a marginal ear vein, and a second dose of indomethacin was given 8 hours later. Control animals received vehicle in place of indomethacin. Laparotomy was performed 24 hours after the initial treatment. The presence of unruptured follicles and corpora lutea was recorded and the ovaries were perfused in vitro for 3 hours. Progesterone, prostaglandin F2 alpha, prostaglandin E2, and 6-keto-prostaglandin F1 alpha were measured in samples obtained at 0, 30, 60, 120, and 180 minutes from the circulating perfusion medium entering and exiting the ovary. At the end of the perfusion all ovaries (12 treated and 10 controls) were fixed for histologic analysis. Ovulation occurred in all control ovaries but in none of the indomethacin-treated ovaries. The mean number of unruptured follicles per ovary in the treated group was not significantly different from the number of corpora lutea plus unruptured follicles per ovary in the controls. Cells in both groups were qualitatively similar in ultrastructure; abundant lipid droplets, smooth endoplasmic reticulum, and mitochondria were seen. Secretion rates of progesterone and prostaglandin did not differ between the two groups during the 3-hour perfusion period. These results suggest that transformation of granulosa cells into fully functional luteal cells can occur in the absence of follicular rupture.