Thymic cells from immature female rats were isolated and used for production of thymic cell culture conditioned medium (TCM). Granulosa cells were obtained from immature diethylstilbestrol (DES)-treated rats. TCM stimulated basal progesterone and estradiol secretion from the granulosa cells in a dose and time dependent manner. Maximal stimulation of progesterone production occurred at 48 hours of incubation, during which period TCM caused approximately 5 times more progesterone secretion than heart cell conditioned medium (HCM) or mock extract (ME). The maximum progesterone secretion by granulosa cells occurred when they were exposed to 48% TCM causing 7 times more progesterone secretion than controls. Under the same maximum stimulatory conditions, however, TCM only approximately doubled estradiol secretion compared to concentrations secreted in the presence of HCM or ME. Thus, the effect of TCM on progesterone secretion was more prominent than its effect on estradiol secretion. The stimulatory action of TCM was not mimicked by HCM, thymosin-alpha 1 or thymulin. Furthermore, the stimulatory action of TCM on steroidogenesis did not appear to be mediated by the cAMP system. The stimulatory factor(s) in TCM were heat, acid and acetone labile, but could not be sedimented by activated charcoal. Thus, the present study demonstrates that the secretory product(s) of thymic epithelial cells can stimulate steroidogenesis in cultured rat granulosa cells. Our data imply that thymic factor(s) may have a direct effect on ovarian function.