The mechanism by which estrogens enhance gonadotropin-stimulated ovarian progestin production was investigated by studying the modulation of pregnenolone biosynthesis as well as the activities of 3 beta-hydroxysteroid dehydrogenase (3 beta-HSD) and 20 alpha-hydroxysteroid dehydrogenase (20 alpha-HSD) in cultured rat granulosa cells. Cells from immature hypophysectomized, estrogen-treated rats were cultured for 3 days with follicle-stimulating hormone (FSH) and/or estrogens. Pregnenolone production was measured in the presence of cyanoketone which inhibits 3 beta-HSD activity. Activities of 3 beta-HSD and 20 alpha-HSD were determined in cell homogenates by direct enzyme assays. Some cells were also primed with FSH to induce luteinizing hormone (LH) receptors for studies on the effects of estrogens on LH-modulated parameters. Pregnenolone production by cultured granulosa cells was stimulated by FSH, while treatment with diethylstilbestrol (DES) or estradiol further enhanced the gonadotropin action. Treatment with FSH increased 3 beta-HSD activity. Similarly, concomitant treatment with DES further enhanced 3 beta-HSD activity in a dose-dependent manner with an apparent ED50 of 10(-8) M. Also, treatment with estrogens alone increased 3 beta-HSD activity. The increases in enzyme activity induced by estrogen alone or in combination with FSH were not associated with changes in the apparent Km values. FSH also stimulated 20 alpha-HSD activity by 2-fold in these cells, while concomitant treatment with DES did not affect the FSH action. In FSH-primed cells, LH stimulated pregnenolone production while the LH action was enhanced by concomitant treatment with the estrogens. Likewise, LH stimulated the activity of 3 beta-HSD, while concomitant DES treatment further augmented LH action. LH did not stimulate 20 alpha-HSD activity when added alone or in combination with DES. Thus, the estrogen enhancement of the gonadotropin-stimulated progesterone production in cultured rat granulosa cells is associated with increases in pregnenolone biosynthesis and the activity of the 3 beta-HSD enzyme, without affecting the 20 alpha-HSD activity.