The ability of bovine granulosa cells to produce inhibin and to synthesize oestradiol-17 beta increased with increasing follicle size in healthy but not atretic follicles. Granulosa cells from small (less than or equal to 5 mm diam.) healthy follicles were indistinguishable from cells of atretic follicles in terms of their ability to produce inhibin and to aromatize androgen. However, granulosa cells from healthy and atretic follicles, irrespective of size, differed markedly in their morphological appearance after culture for 24 h. Testosterone (1 microgram/ml) stimulated inhibin production by granulosa cells from healthy and atretic follicles while FSH (100 ng/ml) stimulated inhibin production by granulosa cells from healthy follicles only. The relative ability of granulosa cells from different sizes of healthy and atretic follicles to produce inhibin in vitro was reflected in inhibin concentrations in follicular fluid. There was a significant positive correlation between inhibin concentration in follicular fluid and the number of granulosa cells per follicle. There was also a significant positive correlation between follicular diameter and inhibin concentration in follicular fluid, but only in healthy follicles. These findings show that both follicular size and atresia influence follicular inhibin production.