Although the role of the TGF beta superfamily members in the regulation of ovarian folliculogenesis has been extensively studied, their involvement in follicular atresia is not well understood. In the present study, we have demonstrated for the first time that Nodal, a member of the TGF beta superfamily, is involved in promoting follicular atresia as evidenced by the following: 1) colocalization of Nodal and its type I receptor Activin receptor-like kinase 7 (ALK7) proteins in the granulosa cells was only observed in atretic antral follicles, whereas they were present in theca cells and granulosa cells of healthy follicles, respectively; 2) addition of recombinant Nodal or overexpression of Nodal by adenoviral infection induced apoptosis of otherwise healthy granulosa cells; 3) constitutively active ALK7 (ALK7-ca) overexpression mimicked the function of Nodal in the induction of granulosa cell apoptosis. Furthermore, overexpression of Nodal or ALK7-ca increased phosphorylation and nuclear translocation of Smad2, decreased X-linked inhibitor of apoptotic proteins (Xiap) expression at both mRNA and protein level and phospho-Akt content, as well as triggered mitochondrial release of death proteins Smac/DIABLO, Omi/HtrA2, and cytochrome c in the granulosa cells. Dominant-negative Smad2 significantly attenuated ALK7-ca-induced down-regulation of Xiap and thus rescued granulosa cells from undergoing apoptosis. In addition, whereas up-regulation of Xiap significantly attenuated ALK7-ca-induced apoptosis, down-regulation of Xiap sensitized granulosa cells to ALK7-ca-induced apoptosis. Furthermore, ALK7-ca-induced apoptosis was significantly attenuated by forced expression of activated Akt, and Akt rescued granulosa cells from undergoing apoptosis via proteasome-mediated ALK7 degradation. Taken together, Nodal plays an atretogenic role in the ovary where it induces granulosa cell apoptosis through activation of Smad2, down-regulation of the key survival molecules Xiap and phospho-Akt, as well as the activation of mitochondrial death pathway.