The influence of various amounts of human chorionic gonadotrophin (HCG), with or without follicle-stimulating hormone (FSH), on aromatase activity, progesterone- and cAMP-accumulation in rat granulosa cells was investigated. Cells were isolated from immature diethylstilbestrol-treated rats and primed for 2 days in vitro with FSH (50 mIU/ml) to give a maximum response of the cells with respect to the induction of aromatase activity. After FSH priming, small amounts of HCG (1-5 mIU/ml) increased aromatase activity during an additional culture period of 24 h, with a maximum of 4- to 5-fold at 5-8 mIU/ml HCG. At higher concentrations of HCG, aromatase activity declined reaching a plateau (1.5-fold stimulation) at 20 mIU/ml HCG. When HCG was combined with FSH (50 mIU/ml) following the priming period, aromatase activity was stimulated in an additive way, reaching a maximum at 4-5 mIU/ml HCG followed by a decline, similar to that seen in the absence of FSH. HCG induced a dose-dependent increase in cAMP with a maximum at 20 mIU/ml. This increase in cAMP was higher when HCG was combined with FSH. Aromatase activity was inhibited by 3-isobutyl-methyl-xanthine and forskolin, both of which induce elevated cAMP levels in the cell. HCG, and HCG in combination with FSH, increased the production of progesterone in a dose-dependent manner until a plateau was reached. In the presence of FSH, this plateau was reached at lower HCG concentrations. Both R5020 and progesterone showed dose-dependent inhibition of aromatase activity. It is concluded that HCG can be responsible for a decline in aromatase activity by stimulating the adenylate cyclase system and progesterone production. The effect of HCG on oestrogen production suggests an important role of LH activity in follicle recruitment and differentiation.