Bone morphogenetic protein and activin membrane-bound inhibitor (BAMBI) regulates mammalian ovarian follicle growth and maturation; however, its effect on luteinized granulosa cells (LGCs) in sheep ovarian follicles remains unknown.Here we explored the regulatory role of LGC functions and steroid hormone synthesis by BAMBI. Multiple sequence alignment revealed that the sheep BAMBI gene sequence was relatively conserved. Sheep LGCs were strongly positive for BAMBI. LGC proliferation increased when BAMBI was silenced and decreased when BAMBI was overexpressed. After BAMBI overexpression, the expression of CASP3, CASP8, CASP9, and BAX significantly increased, whereas that of BCL2 and the ratio of BCL2/BAX expression decreased. The opposite was observed after BAMBI silencing. CDKN1A, CCND1, and CCND2 were downregulated with BAMBI overexpression and upregulated with BAMBI silencing. Expression of steroid hormonerelated genes (CYP11A1, STAR, and 3BHSD), except CYP19A1, significantly increased after BAMBI overexpression. Moreover, estrogen and progesterone secretion increased after BAMBI overexpression and decreased after BAMBI interference.The effect of the exogenous addition of bone morphogenetic protein 2 (BMP2) on GCs was similar to that of BAMBI overexpression. In conclusion, BAMBI can regulate the proliferation and steroid hormone synthesis of sheep LGCs, and BMP2 can affectLGCs as an activator of BAMBI. These findings provide a basis for further research on the physiological role of BAMBI.