The effect of LH and PRL during the differentiation of granulosa cells to luteal cells was examined by determining the ability of LH and PRL to regulate luteal cell receptor content for these hormones and to increase production of progesterone. Preovulatory follicles and corpora lutea were hormonally induced in immature hypophysectomized female rats by sequential treatment with estradiol, hFSH and oLH. The content of receptor for LH was high in granulosa cells of large antral follicles. Administration of LH caused receptor for LH to decrease markedly within 24 h and to remain low for 96 h. In contrast, granulosa cell content of receptor for PRL increased progressively for 48 h following LH stimulation and remained elevated in fully luteinized cells at 96 h. This increase in PRL receptor appears to be functionally related to the ability of luteal cells to respond to PRL. When PRL was given for 4 days after LH, both luteal cell progesterone production and LH receptor content increased progressively after, but not before, 48 h. Since these changes occurred in the absence of LH, the increase in LH receptor appears to be a consequence of, but not a requirement for, the PRL-induced increase in progesterone production. If daily injections of PRL were delayed for 72 or 96 h following LH induction of lutenization, luteolytic rather than luteotropic effects of PRL were observed. Since receptor for PRL remained elevated at 72 and 96 h, intracellular mechanisms and not receptor content, appear to be effecting the response of luteal cell to PRL.