To study the relationship between formation and release of Golgi-derived secretory granules and progesterone secretion, slices of ovine luteal tissue were incubated in the presence of LH and/or calcium ionophore A23187. Increases in progesterone secretion in response to LH and/or ionophore were accompanied by a concomitant release of secretory granules. In contrast, in the presence of colchicine, LH-stimulated progesterone secretion was significantly reduced (P less than 0.01), granule formation appeared to be blocked, and there was little evidence of exocytosis. In addition, unusual pleomorphic membrane-bounded saccules containing an electron-dense material were abundant throughout the centrospheric region of cells treated with colchicine. Because of the close parallelism between formation and release of Golgi-derived secretory granules and progesterone secretion, it appears that progesterone secretion may be coupled to exocytosis of secretory granules. Although the exact content and function of the secretory granules described remains to be elucidated, the data obtained are compatible with the notion that they may contain a progesterone carrier protein.