We have examined the ability of granulosa cells, from carefully selected preovulatory bovine follicles, to secrete oxytocin in vitro. Although cells from 83% of follicles underwent functional luteinization (greatly increased progesterone secretion) in serum-supplemented culture, only 69% had cells capable of oxytocin secretion. Secretion followed a similar time course in all cultures, with the peak appearing on day 3. Oxytocin, but not progesterone, output could be consistently increased by addition of pieces of theca interna tissue, or theca conditioned medium, to the cultures. The effect could be achieved by exposure to theca tissue at any time prior to peak output without altering the time course of secretion. Oxytocin could not be detected in follicular fluid from any of the selected follicles, nor in medium from theca cultured alone. We conclude that the potential for oxytocin secretion is a feature of follicular maturation which is lost during atresia and that the stimulus to secretion is associated with luteinization but not with progesterone output. Finally, the intermixing of follicular cells during corpus luteum formation may provide a mechanism for the enhancement of oxytocin secretion within a predetermined time frame.