Myostatin plays a negative role in skeletal muscle growth regulation but its potential role in the ovary has received little attention. Here, we first examined relative expression of myostatin (MSTN), myostatin receptors (ACVR1B, ACVR2B and TGFBR1) and binding protein, follistatin (FST), in granulosa (GC) and theca (TC) cells of developing bovine follicles. Secondly, using primary GC and TC cultures, we investigated whether myostatin affects steroidogenesis and cell number. Thirdly, effects of gonadotropins and other intrafollicular factors on MSTN expression in GC and TC were examined. MSTN, ACVR1B, TGFBR1, ACVR2B and FST mRNA was detected in both GC and TC at all follicle stages. Immunohistochemistry confirmed follicular expression of myostatin protein. Interestingly, MSTN mRNA expression was lowest in GC of large oestrogen-active follicles whilst GC FST expression was maximal at this stage. In GC, myostatin increased basal CYP19A1 expression and oestradiol secretion whilst decreasing basal and FSH-induced HSD3B1 expression and progesterone secretion and increasing cell number. Myostatin also reduced IGF-induced progesterone secretion. FSH and dihydrotestosterone had no effect on granulosal MSTN expression whilst insulin-like growth factor and tumour necrosis factor-alpha suppressed MSTN level. In TC, myostatin suppressed basal and LH-stimulated androgen secretion in a follistatin-reversible manner and increased cell number, without affecting progesterone secretion. LH reduced thecal MSTN expression whilst BMP6 had no effect. Collectively, results indicate that, in addition to being potentially responsive to muscle-derived myostatin from the circulation, myostatin may have an intraovarian autocrine/paracrine role to modulate thecal and granulosal steroidogenesis and cell proliferation/survival.