The connective tissue matrix of the wall of ovarian follicles is degraded and remodeled during ovulatory rupture and formation of the corpus luteum. Ovarian surface epithelial cells in close contact with the apical wall of preovulatory ovine follicles secrete a urokinase-type plasminogen activator in response to surge levels of gonadotropins. Urokinase activates latent collagenases and stimulates release of tumor necrosis factor alpha from thecal endothelium. Tumor necrosis factor alpha progressively induces matrix metalloproteinase gene expression, apoptosis, and inflammatory necrosis. Collagenolysis and cellular death are a prelude to stigma formation and ovarian rupture. Ovulation is blocked by intrafollicular injection of TNFalpha or MMP-2 antisera. Unruptured follicles luteinize but are deficient in collagenous/vascularized trabeculae, and produce less progesterone than their control luteal counterparts. It appears that TNFalpha, via MMP-2 induction, contributes to the reorganization of an ovulatory follicle into a fully competent corpus luteum.