Concentrations of total and free, non-protein-bound cortisol were determined in serum and pre-ovulatory follicular fluid sampled from 14 women who underwent in-vitro fertilization (IVF) embryo transfer treatment. Seven of the women became pregnant and seven did not. In the pregnant group the number of pre-embryos transferred was equal to the number of implantations, identifying the follicles which contained an oocyte that resulted in a clinical pregnancy after IVF. The concentrations of free and total cortisol in follicular fluid were associated with oocyte cleavage and the establishment of pregnancies. Follicular fluid concentrations of total cortisol averaged 78% of that found in serum (244 versus 312 nM), whereas the concentration of free biologically active cortisol was nearly 10 times higher in follicular fluid than in serum (54 versus 6 nM). In serum > 94% of the cortisol was bound to cortisol binding protein (CBP) and 2.1% was free. In contrast, follicular fluid contained 22% free cortisol and only 48% bound to CBP. Follicles associated with pregnancy contained similar amounts of both free and total cortisol compared with follicles in which the oocyte failed to implant or did not cleave in vitro. It is suggested that the high concentrations of free cortisol in pre-ovulatory follicular fluid may confine and reduce some of the inflammatory-like reactions which take place close to follicular rupture. This study does not support the current concept of cortisol playing a role in follicular development of large antral follicles and oocyte maturation during the follicular phase.