Ovarian follicular development involves continual remodelling of the extracellular matrix (ECM) forming the basement membrane and intercellular framework that support granulosa cell (GC) growth and differentiation. Insight into the molecular regulation of ovarian ECM remodelling is potentially translatable to tissue remodelling elsewhere in the body. We therefore studied the link between a gene marker of ECM remodelling (connective tissue growth factor (CTGF)) and oestrogen biosynthesis (cytochrome P450aromatase (P450arom)) in rat granulosa cells. To determine if a cause–effect interaction exists, we used semi-quantitative in situ hybridisation to analyse patterns of CTGF and P450arom mRNA expression and immunohistochemistry to detect CTGF protein localisation throughout follicular development, and tested the actions of CTGF on oestrogen biosynthesis and oestradiol on CTGF mRNA expression in isolated GC in vitro. CTGF mRNA levels in GC rose gradually through small preantral (SP) and small antral (SA) stages of development to a maximum (fivefold higher) in large antral (LA) follicles. In preovulatory (PO) follicles, the CTGF mRNA level fell to 30% of that in SP follicles. P450arom mRNA also increased (threefold in LA relative to SP) throughout antral development follicles, but in contrast to CTGF continued to increase (12-fold) in PO follicles. In the cumulus oophorus of PO follicles, the residual GC CTGF mRNA expression increased with proximity to the oocyte, being inversely related to P450arom. Elsewhere in the follicle wall, there was a mural-to-antral gradient of CTGF mRNA expression, again inversely related to P450arom. Immunohistochemistry showed CTGF protein localisation broadly followed mRNA expression during follicular development, although the protein was also present in the theca interna and ovarian surface epithelium. Gradients in CTGF expression across the cumulus oophorus and follicle wall were similar to those observed for mRNA with CTGF protein expression being greatest in proximity to the oocyte. Treatment of isolated GC from preantral and SA follicles with recombinant human CTGF (1–100 ng/ml) did not affect basal or FSH-stimulated GC aromatase activity. However, in the absence of FSH, oestradiol (10−7–10−5 M) stimulated CTGF mRNA expression up to twofold. Conversely, FSH (10 ng/ml) alone reduced CTGF mRNA expression by 40% and combined treatment with FSH and oestradiol further suppressed CTGF to 10% of the control value. The oestrogen receptor (ER) antagonist, ICI 182 780 blocked the stimulatory and inhibitory effects of oestradiol, suggesting a specific ER-mediated mode of action on CTGF. Therefore, CTGF gene expression in GC is under local control by oestrogen whose effect (positive or negative) is modulated by FSH. This helps explain why gene expression of CTGF and P450arom diverge in FSH-induced PO follicles and has implications for oestrogenic regulation of CTGF formation elsewhere in the body.