Prior to follicle selection into the preovulatory hierarchy, hen granulosa cells from prehierarchal follicles remain undifferentiated, as defined in part by the virtual absence of LHR mRNA expression and inability to produce progesterone. It has previously been proposed that prior to follicle selection, granulosa cells are actively maintained in an undifferentiated state by epidermal growth factor receptor ligands (EGFRL) signaling via the MAP kinase/extracellular regulated kinase pathway. Moreover, there is recent evidence that EGFRL/MAP kinase signaling modulates FSH receptor (FSHR) transcription, in part, via inhibitor of differentiation/DNA-binding (ID) proteins. In the present studies with undifferentiated granulosa, recombinant human (rh) bone morphogenetic protein 2 (BMP2) induced the phosphorylation of SMAD1/5/8, and blocked transforming growth factor b and FSH-induced FSHR expression and progesterone production. Significantly, BMP2 rapidly induced mRNAs encoding betacellulin and EGF, plus ID proteins (ID1, ID3, and ID4). Alternatively, the bioactivity of BMPs can be modulated by one or more BMP antagonists, including noggin (NOG). NOG mRNA is expressed by both hen granulosa and theca tissues from prehierarchal follicles. Pretreatment of cultured granulosa with rh NOG reversed both the stimulatory effects of BMP2 on ID1, ID3, and ID4 expression and the inhibitory effects of BMP2 on FSHR mRNA levels and progesterone production. Collectively, these data provide evidence that prior to follicle selection, BMP2 signaling contributes toward maintaining granulosa cells in an undifferentiated state. The actions of BMP2 are, at least in part, mediated indirectly via enhanced EGFRL expression and ERBB receptor-mediated MAP kinase signaling, and can be modulated by the autocrine/paracrine production of NOG.