The effect of prolactin on follicular oestradiol production was studied in rat ovaries in which luteal tissue was absent. A silicone tube containing progesterone was implanted before first ovulation and removed 14 days later. This resulted in the presence of preovulatory follicles 2 days later and ovulation 60 h after removal of the implant. Prolactin concentrations were raised either by injection of purified prolactin or by implantation of pituitary tissue under the kidney capsule. Injections with 100 or 200 micrograms prolactin starting at the time of removal of the implant (16.00 h on day 0) had no effect on in-vitro oestradiol production by preovulatory follicles obtained on day 2 (day of pro-oestrus). However, implantation of two pituitary glands under the kidney capsule, 2 weeks before progesterone removal, resulted in significantly lower follicular oestradiol production, although ovulation was not inhibited. Lowering of serum prolactin by injections of bromocriptine resulted in an increased follicular oestradiol production. These results indicate that, in addition to its well-known luteotrophic effect, prolactin can have a direct inhibitory effect on follicular oestradiol production. This effect might contribute to the reduced fertility seen during hyperprolactinaemia.