After ovulation of an oocyte, granulosa cells of the ovarian follicle differentiate into luteal cells and become a major factor dedicated to the synthesis of the steroid hormone progesterone. We recently established granulosa cell lines by cotransfection of granulosa cells with SV-40 and Ha-ras oncogene. In these cells progesterone secretion can be induced by cAMP as in normal rat granulosa cells. The induction of progesterone secretion is observed only after approximately 24 h and closely follows the delayed but quantitatively dramatic induction of the mitochondrial cytochrome P450scc which catalyzes the first step in steroid hormone biosynthesis. The mitochondrial P450 system electron transport proteins, adrenodoxin and adrenodoxin reductase, are also induced but adrenodoxin shows a faster induction. Immunofluorescence studies show that the three enzymes are induced in all cells and incorporated into all mitochondria uniformly. Electron microscopic examination using immunogold technique further confirms this and reveals that adrenodoxin is predominantly located on the matrix side of the inner mitochondrial membrane. Thus, adrenodoxin, which is a small highly charged protein, shows a distribution similar to P450scc which is an integral membrane protein. The uniformity of the response of the cells provides further evidence for the homogeneity of the cell line and makes this new granulosa cell line a highly promising system for the study of the molecular mechanisms involved in changes in gene expression during the process of granulosa cell differentiation.