The effects of estradiol-17 beta on progesterone secretion by isolated bovine theca interna were studied. Preparations of theca interna were obtained from preovulatory follicles of Holstein heifers (n = 5) prior to the endogenous LH surge and cultured for 3 days in a defined medium containing various concentrations of estradiol (0, 0.001, 0.01, 0.1, 1, or 10 microgram/ml). Secretion of progesterone by control theca was low during the first 24 h of culture and increased steadily during the subsequent 48 h. The lowest concentration of estradiol (0.001 microgram/ml) significantly stimulated thecal progesterone production, while higher concentrations (0.1, 1, and 10 microgram/ml) significantly inhibited secretion of progesterone. Estradiol content of the follicular fluid of these preovulatory follicles and several others (n = 13) averaged 1.5 microgram/ml +/- 0.1 (SEM). It is concluded that bovine theca interna is capable of secreting progesterone, that high intrafollicular concentrations of estradiol may inhibit thecal progesterone production in vivo prior to the LH surge, and that estradiol concentration may be be an important modulating factor in the control of follicular progesterone secretion.