Follicular development is associated with both proliferation and differentiation of granulosa cells under the control of FSH. We show that regulation of genes involved in cellular proliferation by FSH can be functionally separated from the regulation of genes involved in granulosa cell differentiation by synergistic actions of activin and T. Incubation of undifferentiated rat granulosa cells with FSH, forskolin, activin-A, or T alone did not influence either the expression of the proliferation-associated genes cyclin D2 and proliferating cell nuclear antigen or the differentiation-associated genes P450 aromatase, LH receptor, P450 cholesterol side-chain cleavage enzyme, and 3 beta-hydroxysteroid dehydrogenase. However, when granulosa cells were stimulated with either FSH or forskolin in the presence of activin-A, significant increases (P < 0.05) were observed for cyclin D2 and proliferating cell nuclear antigen at both the mRNA and protein levels as well as mRNAs for P450 aromatase, LH receptor, P450 cholesterol side-chain cleavage enzyme and 3 beta-hydroxysteroid dehydrogenase. Although T synergized with FSH to increase the expression of mRNAs for P450 aromatase, LH receptor, P450 cholesterol side-chain cleavage enzyme, and 3 beta-hydroxysteroid dehydrogenase, it did not interact with FSH to increase the expression of mRNAs for cyclin D2 and proliferating cell nuclear antigen. The differences in the actions of activin and T could provide a cellular mechanism by which FSH-regulated granulosa cell proliferation could be functionally separated from FSH-regulated granulosa cell differentiation.