The present study was designed to determine whether progesterone might have a role in gonadotrophin-induced pituitary adenylate cyclase-activating polypeptide (Pacap) gene expression in rat ovary. Northern blot analysis revealed that treatment of pregnant mare's serum gonadotrophin (PMSG)-primed immature rats with the progestin antagonist RU486 or an inhibitor of 3beta-hydroxysteroid dehydrogenase epostane, 1 h before HCG, resulted in a dose-dependent inhibition of the HCG-induced Pacap gene expression. In-situ hybridization demonstrated that the number of pre-ovulatory follicles expressing Pacap mRNA in their granulosa cells was greatly reduced in ovaries treated with RU486. Moreover, the suppressive effect of RU486 or epostane on the LH-induced Pacap gene expression in cultured pre-ovulatory follicles was reversed by co-treatment with the synthetic progestin R5020. We further cloned the 5'-flanking region of the rat Pacap gene and identified the presence of a consensus progesterone receptor element. When luciferase fusion genes containing Pacap gene promoter were transiently transfected into granulosa cells of pre-ovulatory follicles, luciferase activity was markedly stimulated by LH. Treatment with RU486 or epostane resulted in partial suppression of LH-stimulated PACAP promoter activity. Taken together, these results indicate that progesterone, acting through progesterone receptors, plays a role in gonadotrophin induction of Pacap gene expression in granulosa cells of pre-ovulatory follicles, and thereby may be involved in the process of ovulation.