Preantral ovarian follicles isolated from prepubertal sheep ovaries were individually cultured for 6 days in the presence of increasing doses of FSH (ranging from 0.01 to 1 microg/ml) and under two different oxygen concentrations, 20% and 5% O2. Follicle development was evaluated on the basis of antral cavity formation as well as the presence of healthy cumulus oocyte complexes. Follicle growth was enhanced by FSH addition to culture medium, while the use of a low oxygen concentration slightly stimulated this process. However, when follicles were cultured in the presence of high doses of FSH (1 microgram/ml) and under low oxygen concentration, a high proportion of them showed the presence of an antral cavity and of a healthy cumulus-oocyte complex. In addition, under this specific culture condition sheep preantral follicles released higher levels of estradiol as compared to those secreted at lower FSH concentrations or under 20% O2. When the meiotic competence of oocytes derived from follicles cultured at 1 microgram/ml FSH was assessed, no significant difference was recorded between the two oxygen groups. These results show that the culture conditions here identified are beneficial to in vitro growth and differentiation of sheep preantral follicles.