We have recently reported that oocyte-derived bone morphogenetic protein-15 (BMP-15) can directly modulate follicle-stimulating hormone (FSH) action in rat granulosa cells. Here, we investigate underlying mechanisms of this BMP-15 effect. Treatment with BMP-15 alone exerted no significant effect on the basal expression of mRNAs encoding steroidogenic acute regulatory protein, P450 side chain cleavage enzyme, P450 aromatase, 3beta-hydroxysteroid dehydrogenase, luteinization hormone receptor, and inhibin/activin subunits. However, BMP-15 markedly inhibited the FSH-induced increases in these messages. In striking contrast, BMP-15 did not change the forskolin-induced levels of these transcripts. Thus, the inhibitory effect of BMP-15 on FSH action must be upstream of cAMP signaling. We next examined changes in FSH receptor mRNA expression. Interestingly, BMP-15 severely reduced the levels of FSH receptor mRNA in both basal and FSH-stimulated cells. To determine whether this effect was at the level of FSH function, we investigated the effect of BMP-15 on FSH bioactivity. Consistent with the mRNA data, BMP-15 inhibited the biological response of FSH, but not that of forskolin. Based on these results, we propose that BMP-15 is an important determinant of FSH action through its ability to inhibit FSH receptor expression. Because FSH plays an essential role in follicle growth and development, our findings could have new implications for understanding how oocyte growth factors contribute to folliculogenesis.