The XY (B6.Y(TIR)) sex-reversed female mouse is infertile, primarily because of the early death of its embryos. We have previously determined that the XY oocyte itself, not the surrounding somatic cells, is responsible for its failure in postfertilization development. In the present study, we assessed the ability of the XY oocyte to regulate granulosa cell differentiation and functions. Oocyte-cumulus complexes (OCC) were isolated from antral follicles and were cultured in the presence of FSH and testosterone. Microsurgical removal of oocytes prevented cumulus cell expansion and suppressed estradiol production while it promoted progesterone production. Coculture with denuded oocytes from either XX or XY ovaries restored cumulus expansion and the endocrine profile observed in intact OCC. Morphology of oocytes and OCC in the preantral and antral follicles in situ as well as after isolation was compared for XX and XY ovaries. The average area of XY oocytes was smaller by 20% only at the preantral stage, whereas the zona pellucida layer was thinner by 20% at all stages. Furthermore, the XY oocyte was found to be attached to fewer cumulus cells (60% of XX control) in antral follicles and isolated OCC. In conclusion, the XY oocyte develops the normal ability of regulating granulosa cell differentiation despite its inferiority with respect to some morphometric parameters when compared to the XX oocyte.