The small G-protein KRAS is crucial for mediating gonadotropin-induced events associated with ovulation. However, constitutive expression of KrasG12D in granulosa cells disrupted normal follicle development leading to the persistence of abnormal follicle-like structures containing nonmitotic cells. To determine what factors mediate this potent effect of KrasG12D, gene profiling analyses were done. We also analyzed KrasG12D;Cyp19-Cre and KrasG12;Pgr-Cre mutant mouse models that express Cre prior to or after the initiation of granulosa cell differentiation, respectively. KrasG12D induced cell cycle arrest in granulosa cells of the KrasG12D;Cyp19-Cre mice but not in the KrasG12D;Pgr-Cre mice, documenting the cell context-specific effect of KrasG12D. Expression of KrasG12D silenced the Kras gene, reduced cell cycle activator genes, and impaired the expression of granulosa cell and oocyte-specific genes. Conversely, levels of PTEN and phosphorylated p38 mitogen-activated protein kinase (MAPK) increased markedly in the mutant granulosa cells. Because disrupting Pten in granulosa cells leads to increased proliferation and survival, Pten was disrupted in the KrasG12D mutant mice. The Pten/Kras mutant mice were infertile but lacked granulosa cell tumors. By contrast, the Ptenfl/fl;KrasG12D;Amhr2-Cre mice developed aggressive ovarian surface epithelial cell tumors that did not occur in the Ptenfl/fl;KrasG12D;Cyp19-Cre or Ptenfl/fl;KrasG12D;Pgr-Cre mouse strains. These data document unequivocally that Amhr2-Cre is expressed in and mediates allelic recombination of oncogenic genes in ovarian surface epithelial cells. That KrasG12D/Pten mutant granulosa cells do not transform but rather undergo cell cycle arrest indicates that they resist the oncogenic insults of Kras/Pten by robust self-protecting mechanisms that silence the Kras gene and elevate PTEN and phosphorylated p38 MAPK.