Intraovarian progesterone levels were manipulated by surgically adjusting the number of corpora lutea (CL) present in rabbit ovaries and this model was used to study the local effect of luteal progesterone on growth of follicles. The results show that when a single CL or several CL were present, follicle growth was inhibited. However, when all CL on one ovary were removed, increased numbers of follicles grew even when a single CL was present in the contralateral ovary. These findings show that progesterone inhibits follicle growth and that at least part of its action is local, i.e., exerted within the ovary. Additionally, ovarian blood vessels and periovarian lymph ducts were cannulated, and samples were collected and analyzed for steroid and protein content. The results show that when CL were present, ovarian vein progesterone levels were elevated 10-30-fold over levels in ovaries without CL; this high concentration points to the blood vascular system as the principal carrier of the steroid within the ovary. Analysis of lymph showed that protein content was consistently high and that the progesterone concentration was not significantly altered with the presence of CL; these two findings show that ovarian capillaries are extremely permeable to proteins, but the unexpectedly low concentrations of progesterone in lymph may signal an intraovarian countercurrent mechanism by which it is returned to the blood.