The objectives of this study were to characterize the relationship between estradiol and transforming growth factor-beta1(TGF-beta1) concentrations in follicular fluid of growing bovine ovarian follicles, and to examine the effect of TGF-beta1 on FSH-stimulated estradiol secretion in cultured bovine granulosa cells. Follicular fluid was collected from individual follicles >5 mm in diameter by ultrasound-guided transvaginal puncture (n = 12 heifers). Follicles were sampled at four different stages of development of the first post-ovulatory wave during selection of the single dominant follicle. Estradiol, progesterone and total TGF-beta1 were measured in follicular fluid of the three or four largest follicles sampled when the largest follicle (F1) had reached either 6.5, 7.5, 8.5 or 9.5+/-0.5 mm stage of development. There was a significant negative relationship between follicular fluid TGF-beta1 and estradiol concentrations (R2 = 0.44; p < 0.002), and between TGF-beta1 concentrations and follicle diameter (R2 = 0.23; p < 0.01) in cohort follicles at the 6.5 mm stage, but not at any later stage of development of the follicle wave. There was no correlation between progesterone and TGF-beta1 concentrations at any stage. To assess the causal relationship between TGF-beta1 and estradiol, granulosa cells from follicles measuring 2-5 mm at dissection were placed in serum-free culture. TGF-beta1 caused a dose-dependent decrease in FSH-stimulated estradiol secretion (P < 0.001). These findings suggest that TGF-beta1 has an inhibitory effect on estradiol secretion in FSH-stimulated follicles and that a reduction in TGF-beta1 inhibition may be part of the mechanism of selection of a single dominant follicle.