Although the transforming growth factor-beta (TGF-beta) superfamily is the largest family of secreted growth factors, surprisingly few downstream target genes in their signaling pathways have been identified. Likewise, the identities of oocyte-derived secreted factors, which regulate important oocyte-somatic cell interactions, remain largely unknown. For example, oocytes are known to secrete paracrine growth factor(s) which are necessary for cumulus expansion, induction of hyaluronic acid synthesis, and suppression of LH receptor (LHR) mRNA synthesis. Our previous studies demonstrated that absence of the TGF-beta family member, growth differentiation factor-9 (GDF-9), blocks ovarian folliculogenesis at the primary follicle stage leading to infertility. In the present study, we demonstrate that mouse GDF-9 protein is expressed in all oocytes beginning at the type 3a follicle stage including antral follicles. To explore the biological functions of GDF-9 in the later stages of folliculogenesis and cumulus expansion, we produced mature, glycosylated, recombinant mouse GDF-9 using a Chinese hamster ovary cell expression system. A granulosa cell culture system was established to determine the role of GDF-9 in the regulation of several key ovarian gene products using semiquantitative RT-PCR. We find that recombinant GDF-9 induces hyaluronan synthase 2 (HAS2), cyclooxygenase 2 (COX-2), and steroidogenic acute regulator protein (StAR) mRNA synthesis but suppresses urokinase plasminogen activator (uPA) and LHR mRNA synthesis. Consistent with the induction of StAR mRNA by GDF-9, recombinant GDF-9 increases granulosa cell progesterone synthesis in the absence of FSH. Since induction of HAS2 and suppression of the protease uPA in cumulus cells are key events in the production of the hyaluronic acid-rich extracellular matrix which is produced during cumulus expansion, we determined whether GDF-9 could mimic this process. Using oocytectomized cumulus cell-oocyte complexes, we show that recombinant GDF-9 induces cumulus expansion in vitro. These studies demonstrate that GDF-9 can bind to receptors on granulosa cells to regulate the expression of a number of gene products. Thus, in addition to playing a critical function as a growth and differentiation factor during early folliculogenesis, GDF-9 functions as an oocyte-secreted paracrine factor to regulate several key granulosa cell enzymes involved in cumulus expansion and maintenance of an optimal oocyte microenvironment, processes which are essential for normal ovulation, fertilization, and female reproduction.