Anovulation in polycystic ovary syndrome (PCOS) is associated with hyperinsulinemia and insulin resistance, but it has been unclear whether the ovary is insulin resistant in women with PCOS. The aims of this study were, firstly, to determine whether human granulosa cells respond to physiological concentrations of insulin and, secondly, to investigate insulin and gonadotropin interactions in vitro in granulosa cells obtained from normal (N) and polycystic ovaries (PCO). Granulosa cells were incubated with insulin with or without gonadotropins for 48 h. Insulin augmented not only basal production of estradiol and progesterone, but also LH-stimulated steroid accumulation in granulosa cell cultures from N and PCO. Insulin enhanced FSH-stimulated progesterone production by granulosa cells from N and PCO, but the effect on FSH-stimulated estradiol production was variable, ranging from no effect for granulosa cells from N to synergistic for granulosa cells from PCO of anovulatory subjects. Preincubation with insulin for 48 h increased subsequent basal and LH-induced, but not FSH-stimulated, steroid production. These data demonstrate that granulosa cells from PCO respond to insulin despite the association, in vivo, of PCOS with peripheral insulin resistance. Insulin preincubation enhances the subsequent response of human granulosa cells to LH. We propose that in anovulatory women with PCOS, elevated levels of insulin interacting with LH may contribute to the mechanism of anovulation.