Oocyte control of granulosa and theca cell function may be mediated by several growth factors via a local feedback loop(s) between these cell types. This study examined both the role of oocyte-secreted factors on granulosa and thecal cells, cultured independently and in co-culture, and the effect of stem cell factor (SCF); a granulosa cell derived peptide that appears to have multiple roles in follicle development. Granulosa and theca cells were isolated from 2–6 mm healthy follicles of mature porcine ovaries and cultured under serum-free conditions, supplemented with: 100 ng/ml LR3 IGF-1, 10 ng/ml insulin, 100 ng/ml testosterone, 0–10 ng/ml SCF, 1 ng/ml FSH (granulosa), 0.01 ng/ml LH (theca) or 1 ng/ml FSH and 0.01 ng/ml LH (co-culture) and with/without oocyte conditioned medium (OCM) or 5 oocytes. Cells were cultured in 96 well plates for 144 h, after which viable cell numbers were determined. Medium was replaced every 48 h and spent medium analysed for steroids.Oocyte secreted factors were shown to stimulate both granulosa cell proliferation (P < 0.001) and oestradiol production (P < 0.001) by granulosa cells throughout culture. In contrast, oocyte secreted factors suppressed granulosa cell progesterone production after both 48 and 144 hours (P < 0.001). Thecal cell numbers were increased by oocyte secreted factors (P = 0.02), together with a suppression in progesterone and androstenedione synthesis after 48 hours (P < 0.001) and after 144 hours (P = 0.02), respectively. Oocyte secreted factors also increased viable cell numbers (P < 0.001) in co-cultures together with suppression of progesterone (P < 0.001) and oestradiol (P < 0.001). In granulosa cell only cultures, SCF increased progesterone production in a dose dependent manner (P < 0.001), whereas progesterone synthesis by theca cells was reduced in a dose dependent manner (P = 0.002). Co-cultured cells demonstrated an increase in progesterone production with increasing SCF dose (P < 0.001) and an increase in oestradiol synthesis at the highest dose of SCF (100 ng/ml). In summary, these findings demonstrate the presence of a co-ordinated paracrine interaction between somatic cells and germ cells, whereby oocyte derived signals interact locally to mediate granulosa and theca cell function. SCF has a role in modulating this local interaction. In conclusion, the oocyte is an effective modulator of granulosa-theca interactions, one role being the inhibition of luteinization.