Early corpus luteum development in nonpregnant and pregnant goats was characterized by a steady increase in peripheral plasma concentrations of progesterone and a high release of prostacyclin (PGI-2) but low release of prostaglandin F-2 alpha (PGF-2 alpha). Jugular administration of oxytocin antagonist (OXA) (0.2 microgram/kg/day) on the day of oestrus and for 3 days thereafter to cyclic and mated goats, significantly (P less than 0.001) inhibited progesterone and prostaglandin secretion and reduced conception rate. Co-administration of PGI-2 (200 micrograms/day) with OXA resulted in a steady increase of progesterone and establishment of pregnancy, but co-administration of PGF-2 alpha (175 micrograms/day) with OXA had no effect. It is suggested that oxytocin is required for early development of the corpus luteum and such effects may be mediated via PGI-2 production.