This study was conducted to examine the effect of ovarian cysts that develop after administration of a gonadotropin-releasing hormone (GnRH) analog during an ovulation induction program for patients with polycystic ovarian syndrome. Twenty-eight women received Decapeptyl Continuous Release for 10 cycles starting on day 3 of the menstrual cycle, after exclusion of any ovarian pathology by transvaginal ultrasonography. Fifteen days later ultrasonography was again performed and serum estradiol estimated. Cystic structures ≥ 20 mm in the ovaries were defined as follicle cysts. In three cycles follicle cysts developed and low estradiol levels were measured (Group 1). In another six cycles cysts developed after GnRH analog, and elevated estradiol levels were found (Group 2). In the latter, estradiol decreased 3 to 7 days later, with cyst regression in three cases. Ovulation induction with human menopausal gonadotropin (hMG) was initiated only if the estradiol level was ≤ 20 pg/ml, otherwise induction was postponed until estradiol decreased, disregarding the presence of cysts. When 2 to 3 follicles were ≥ 18 mm, and generally when estradiol levels were < 1500 pg/ml, human chorionic gonadotropin was administered. All the cycles were ovulatory and two women from Group 2 conceived. The development of follicle cysts with low serum estradiol levels after GnRH analog administration represents a benign condition and is not a contraindication for hMG stimulation. In cases with elevated estradiol levels, ovulation induction can be postponed until the estradiol has decreased. Our study revealed good ovulatory and pregnancy rates as a result.