The preantral-early antral follicle transition is the penultimate stage of follicular development in terms of gonadotropin dependence and follicle destiny (growth versus atresia). Follicular growth during this period is tightly regulated by oocyte-granulosa-theca cell interactions. Formation of the theca cell layer is a key event that occurs during this transitional stage. Granulosal factor(s) stimulates the recruitment of theca cells from cortical stromal cells, while oocyte-derived growth differentiation factor-9 (GDF-9) is involved in the differentiation of theca cells during this early stage of follicular development. The preantral to early antral transition is most susceptible to follicular atresia. GDF-9 promotes follicular survival and growth during transition from preantral stage to early antral stage by suppressing granulosa cell apoptosis and follicular atresia. GDF-9 also enhances preantral follicle growth by up-regulating theca cell androgen production. Thecal factor(s) promotes granulosa cell proliferation and suppress granulosa cell apoptosis. Understanding the intraovarian mechanisms in the regulation of follicular growth and atresia during this stage may be of clinical significance in the selection of the best quality germ cells for assisted reproduction. In addition, since certain ovarian dysfunctions, such as polycystic ovarian syndrome and gonadotropin poor-responsiveness, are consequences of dysregulated follicle growth at this transitional stage, understanding the molecular and cellular mechanisms in the control of follicular development during the preantral-early antral transition may provide important insight into the pathophysiology and rational treatment of these conditions.