Hypoxia-inducible factor 1 (HIF1) is a heterodimeric transcription factor, consisting of a constitutively expressed β-subunit (HIF1B) and a regulated α-subunit (HIF1A). In the present study, we analyzed the HIF1 driven transcriptional activity in bovine granulosa cells (GC). Treatment of GC with FSH (follicle stimulating hormone) and IGF1 (insulin-like growth factor 1) resulted in the upregulation of HIF1A mRNA expression under normoxia. Immunohistochemistry of bovine ovarian sections showed distinct staining of HIF1A in the GC layer of different staged ovarian follicles. Suppression of HIF1 using echinomycin and gene knockdown procedures revealed that HIF1 transcriptionally regulates the genes associated with steroidogenesis (STAR, HSD3B and CYP19A1) and proliferation (CCND2 and PCNA) of GC. Further, our data suggest that CYP19A1, the key gene of estradiol production, is one of the plausible downstream targets of HIF1 in bovine GC as shown by gene expression, radioimmunoassay, and chromatin precipitation analysis. Based on these results, we propose that HIF1 driven transcriptional activity plays a crucial role in GC functionality, especially steroidogenesis and proliferation in developing bovine ovarian follicles.