The complete nucleotide sequence for rat ovarian aromatase cytochrome P450 (P450arom) has been derived from four cDNA clones isolated from three rat granulosa/luteal cell lambda gt11 cDNA expression libraries. The composite P450arom cDNA extends 1597 basepairs, encodes a protein of 508 amino acids (calculated mol wt = 58,263), and hybridizes to three mRNA transcripts (3.3, 2.6, and 1.9 kilobases in size) in rat ovarian tissues. A 5' genomic fragment was isolated from a rat genomic library and shown to contain exon I and 538 basepairs of 5' flanking sequences, including putative promoter elements. Further, we document that P450arom mRNA and estradiol (E) biosynthesis are regulated by cAMP-dependent mechanisms in granulosa cells of preovulatory (PO) follicles, but are maintained by cAMP-independent mechanisms after LH/hCG-induced luteinization. The transition of the PO granulosa cell to the luteal cell (PO + hCG) phenotype requires 5 h of exposure to hCG in vivo. Once the luteal cell phenotype is programed, P450arom mRNA and E biosynthesis are maintained in the luteinized cells for up to 10 days in a constitutive manner in the absence of hormones or agents that increase intracellular cAMP. Furthermore, when PO + hCG (7 h) follicles were isolated and incubated for 1-3 h with reversible inhibitors of transcription (actinomycin-D) or translation (cycloheximide) before harvesting the granulosa cells, neither morphological nor functional luteinization of granulosa cells in culture was impaired. Thus, rapid cellular and molecular events occur in granulosa cells within 5-7 h after an ovulatory LH/hCG surge that alter the hormonal regulation of the aromatase gene.