The present study was undertaken to investigate the endocrine disrupting activity of PCB3 and its hydroxylated metabolites 4-OH-PCB3 and 3,4-diOH-PCB3 in ovarian follicle cells derived from prepubertal animals with special emphasis on cytochrome P-450-dependent aromatase (CYP19). Aromatase activity was assayed simply by measuring the production of 17beta-estradiol in the culture medium after addition of the substrate (testosterone). Theca interna and granulosa cells were exposed in vitro to 6 ng/ml of test chemicals for 24, 48, 72 and 96 h. PCBs stimulated the conversion of testosterone to estradiol in all treatments. In addition, PCB3, and to a lesser extent its metabolites, decreased progesterone secretion by these cells. This increase in estradiol and simultaneous decrease in progesterone suggests that progesterone is converted to testosterone and further to estradiol. The rank order of potency in estradiol secretion was 3,4-diOH-PCB3>4-OH-PCB3>PCB3. The non-steroidal aromatase inhibitor CGS 16949A abolished this stimulatory activity, and reduced estradiol levels in treatment and control groups below the control levels, verifying that the increased estradiol secretion by follicle cells was due to aromatase activity. We infer that: (1) metabolism of PCB3 does not protect against endocrine disruption and (2) the estrogenic effect of these compounds is due to stimulation of aromatase activity.