Estrogen regulation of thecal cell steroidogenesis and differentiation was investigated with cells from ovarianantral follicles. Bovine theca interna cells were isolated and cultured in serum-free conditions to evaluate the effects of estradiol on thecal cell production of androstenedione, testosterone, and progesterone. Estradiol increased thecal cell androgen production throughout a 6-day culture period; however, the basal and stimulated levels of androgen production diminished after day 3 of culture. Androstenedione accumulation was approximately10-fold greater than that of testosterone. In contrast tothe stimulatory effects that estradiol had on androgen production, estradiol suppressed progesterone production throughout the 6-day culture period. Comparison of the effects of estradiol and hCG on thecal cells from small (< 5 mm), medium (5-10mm), and large (>10 mm) antral follicles demonstrated that estradiol stimulated androgen production to a greater extent than hCG with cells from all of these stages of follicle development. Estradiol stimulation of androstenedione was greater intheca from small follicles than in theca from medium or largefollicles. In contrast, suppressive effects of estradiol on progesteronewere most apparent on thecal cells from medium andlarge follicles and less apparent on theca from small follicles. Estradiol stimulated androstenedione production in a dose-dependent fashion, with a minimum effective concentration of 10-9M and a maximum effective concentration of 10-7-10-6M. Concentrations greater than 10-6M estradiol resulted in a decline in the stimulatory response and may be important in the preovulatory follicle to suppress thecal cell androgen production andinitiate the process of luteinization. Progesterone productionwas slightly stimulated by 10-9M estradiol, whereas higherconcentrations (10-7-5 × 10-6M) resulted in a dose-dependentsuppression of progesterone production. Interestingly, combinedtreatment of thecal cells with estradiol and hCG resulted in a greater than additive stimulation of androstenedione production, and estradiol decreased the ability of hCG to stimulate progesterone production. Observations demonstrate that estradiol can dramatically alter thecal cell production of steroids and support a hypothesis that steroid-mediated interactions between granulose and thecal cells play an important role in regulating cellular function within follicles. The data provide evidence that a local feedback loop may exist in ovarian follicles, where androgens produced by thecal cells are used as a substrate for granulose cell aromatization into estrogens, which, in turn, may feed back to stimulate thecal cell production of androgens. The information obtained provides insight into the mechanisms involved inregulating thecal cell function and indicates that estradiol may have an important role in the control of thecal cell function and differentiation. © 1990 by The Endocrine Society.