Molecular biology, and in particular the ability to modify genetic composition in vivo through transgenesis, has revolutionized the study of reproductive biology. Knowledge of the mechanisms of oocyte growth and hormone action have benefited from the identification and characterization of several novel genes involved in ovarian development and function. There are hundreds of genetically altered mice, appearing spontaneously or by design, that have impairments in female reproductive performance, and the cellular and molecular characterization of some of these deficiencies has lead to the discovery of similar abnormalities in infertile women. There is also growing appreciation for the ability of germ cells to play a significant role in ovarian function, and the recent identification of oocyte-specific factors with regulatory actions on the surrounding somatic cells will undoubtedly lead to critical advances in our understanding of the complex biochemical interactions that control ovarian folliculogenesis. This review will focus on the molecular mechanisms controlling the two primary functions of the ovary--oocyte development and steroid hormone production, with particular emphasis on the germ cell-somatic cell interactions that form the basis for these activities.