The effects of estradiol, FSH and LH on ovarian follicular development and granulosa cell differentiation were examined in the immature rat hypophysectomized on day 24 of age. Administration of estradiol to hypophysectomized rats for 4 days stimulated the growth of large preantral follicles with a concomitant 1.5-fold increase in FSH receptor content and a 4-fold decrease in LH receptor content in the granulosa cells. When highly purified hFSH was administered alone, receptor content for FSH increased progressively for 4 days while receptor for LH remained essentially unchanged. However, when rats were pretreated with estradiol, the response of follicles to FSH was markedly enhanced as indicated by the appearance of large, antral follicles and elevated receptor content for both FSH and LH. Receptor content for FSH increased markedly in response to hFSH following only one day of estradiol pretreatment, while receptor content for LH increased most rapidly in response to hFSH after 3 days of estradiol pretreatment. LH administered to rats possessing large preovulatory follicles caused luteinization of granulosa cells and a marked decline in receptor content for both gonadotropins within 24 h. Receptor content remained low even 48 h after LH administration when granulosa cells were fully luteinized. These results indicated that follicular development and granulosa cell differentiation are dependent on steroid-protein hormone regulation of hormone specific receptors.