The main emphasis of this paper is on the changes in function of granulosa cells as they undergo cytodifferentiation in follicles developing from the preantral to the antral stage, and on the hormones present in the milieu of gonadotrophins and steroids which are essential for these events to proceed normally. We found that FSH alone could induce aromatase activity in cultures of immature granulosa cells and that this effect could be duplicated by dibutyryl cyclic AMP. Incubation of cell sonicates under optimal conditions indicated that FSH acted on granulosa cells to increase the cellular concentration of active aromatase. Prior treatment with androgens augmented the FSH effect. Progesterone synthesis is another differentiated function which can be induced in culture by FSH alone and augmented in the presence of androgens. In assessing the enzymes involved in progesterone synthesis we found that cholesterol side-chain cleavage activity had similar hormonal requirements whereas 3 beta-hydroxysteroid dehydrogenase activity was stimulated by FSH alone. FSH also stimulates cyclic AMP binding activity in cultured granulosa cells during cytodifferentiation. These proteins represent another class of intracellular proteins, quite distinct from the steroidogenic enzymes, which increase as the granulosa cells mature. The ability of FSH to induce the appearance of LH and prolactin receptors, and stimulate the secretion of plasminogen activator and proteoglycans is reviewed. It is concluded that the appearance of steroidogenic enzymes and other intracellular proteins, cell-surface and secreted proteins as well as morphological maturation of granulosa cells require the presence of FSH. In the "turning-on" of some of these differentiated functions androgens play a permissive role. Having established events which occur during normal development of the follicle, we considered ways by which this overall process could be interrupted and fertility controlled. Here we describe the ways by which prolactin and LHRH interfere with the normal process of granulosa cell cytodifferentiation.