At the onset of the LH surge in the rat, the proliferation of granulosa cells in preovulatory follicles is inhibited, aromatase activity is attenuated, and the cells enter a further phase of differentiation to form the CL. Whereas the LH surge induces these changes in the granulosa cells, it is possible that the actions of LH are mediated or modulated by paracrine and/or autocrine factors. A factor that may modulate the actions of LH is transforming growth factor alpha (TGF alpha). TGF alpha has the ability to inhibit granulosa cell growth and induce a change in the pattern of steroidogenesis from estrogen to progesterone synthesis, a change characteristic of early luteinization. To investigate whether there is a temporal relationship between the appearance of LH receptors and TGF alpha in the adult rat ovary, we localized LH receptors and TGF alpha during follicular development, atresia, and CL formation. In the interstitial compartment, the pattern of immunostaining for LH receptors and TGF alpha remained constant and was not affected by the stage of follicular development. As thecal cells differentiated from the stroma and formed several layers around the secondary follicle, the thecal cells stained positively for both LH receptors and TGF alpha. This immunostaining in thecal cells persisted in preantral, antral, and preovulatory follicles, even in follicles that became atretic. Granulosa cells did not contain detectable levels of LH receptor until the large antral stage of follicular development.(ABSTRACT TRUNCATED AT 250 WORDS)