The aim of the present study was to investigate the effects of activin-A and follistatin on in vitro primordial and primary follicle development in goats. To study primordial follicle development (experiment 1), pieces of ovarian cortex were cultured in vitro for 5 days in minimal essential medium (MEM) supplemented with activin-A (0, 10 or 100 ng/ml), follistatin (0, 10 or 100 ng/ml) or combinations of the two. After culture, the numbers of primordial follicles and more advanced follicle stages were calculated and compared with those in non-cultured tissue. Protein and mRNA expression of activin-A, follistatin, Kit ligand (KL), growth differentiation factor-9 (GDF-9) and bone morphogenetic protein-15 (BMP-15) in non-cultured and cultured follicles were studied by immunohistochemistry and PCR. To evaluate primary follicle growth (experiment 2), freshly isolated follicles were cultured for 6 days in MEM plus 100 ng/ml activin-A, 100 ng/ml follistatin or 100 ng/ml activin-A plus 200 ng/ml follistatin. Morphology, follicle and oocyte diameters in cultured tissue and isolated follicles before and after culture were assessed. Terminal deoxynucleotidyl transferase-mediated dUTP nick-end labelling (TUNEL) reactions were performed to study DNA fragmentation in follicles. In experiment 1, it was found that goat primordial follicles were activated to develop into more advanced stages, i.e. intermediate and primary follicles, during in vitro culture, but neither activin-A nor follistatin affected the number of primordial follicles that entered the growth phase. Activin-A treatment enhanced the number of morphologically normal follicles and stimulated their growth during cortical tissue culture. The effects were, however, not counteracted by follistatin. The follicles in cultured goat tissue maintained their expression of proteins and mRNA for activin-A, follistatin, KL, GDF-9 and BMP-15. Fewer than 30% of the atretic follicles in cultured cortical tissue had TUNEL-positive (oocyte or granulosa) cells. Activin-A did not affect the occurrence of TUNEL-positive cells in follicles within cortical tissue. In experiment 2, addition of activin-A to cultured isolated primary follicles significantly stimulated their growth, the effect being counteracted by follistatin. Absence of such a neutralizing effect of follistatin in the cultures with ovarian cortical tissue can be due to lower dose of follistatin used and incomplete blockage of activin in these experiments. In contrast to cortical enclosed atretic follicles, all atretic follicles that had arisen in cultures with isolated primary follicles had TUNEL-positive cells, which points to differences between isolated and ovarian tissue-enclosed follicles with regard to the followed pathways leading to their degeneration. In summary, this in vitro study has demonstrated that cultured goat primordial follicles are activated to grow and develop into intermediate and primary follicles. During in vitro culture, the follicles maintain their ability to express activin-A, follistatin, KL, GDF-9 and BMP-15. The in vitro growth and survival of activated follicles enclosed in cortical tissue and the in vitro growth of isolated primary follicles are stimulated by activin-A.