The effect of estradiol on the binding of epidermal growth factor (EGF) was investigated in a rat granulosa cell culture system. Cultured granulosa cells without estradiol possess an EGF receptor with a Kd value of 7.4 x 10(-10) M and binding sites of 1.45 x 10(3) molecules per cell. The addition of estradiol to the culture media resulted in an increase in the binding of EGF in a dose-dependent manner at concentration between 10(-9) M and 10(-7) M. Estradiol at 10(-7) M produced a 2.5-fold increase in the number of binding sites without affecting the binding affinity. An increase in the binding was observed as early as after 6 h incubation. The addition of testosterone alone had no effect on the EGF binding. However, in the presence of follicle stimulating hormone, it increased the binding dose-dependently. The stimulatory effect of testosterone was completely abolished by an aromatase inhibitor, thus suggesting that estradiol converted from testosterone could be a contributing factor in the mechanism of testosterone action. These observations imply that estradiol may play a role in regulating growth and the differentiation of granulosa cells by modulating the EGF binding.