Many mammals, including cattle, can develop ovarian follicular cysts, but the physiological mechanisms leading to this condition remain undefined. We hypothesized that follicular cysts can develop because estradiol will induce a GnRH/LH surge on one occasion but progesterone exposure is required before another GnRH/LH surge can be induced by estradiol. In experiment 1, 14 cows were synchronized with an intravaginal progesterone insert (IPI) for 7 days, and prostaglandin F(2alpha) was given on the day of IPI removal. Estradiol benzoate (EB; 5 mg i.m.) was given 3 days before IPI removal to induce atresia of follicles. Cows were given a second EB treatment 1 day after IPI removal to induce a GnRH/LH surge in the absence of an ovulatory follicle. All cows had an LH surge following the second EB treatment, and 10 of 14 cows developed a large-follicle anovulatory condition (LFAC) that resembled follicular cysts. These LFAC cows were given a third EB treatment 15 days later, and none of the cows had an LH surge or ovulation. Cows were then either not treated (control, n = 5) or treated for 7 days with an IPI (n = 5) starting 7 days after the third EB injection. Cows were treated for a fourth time with 5 mg of EB 12 h after IPI removal. All IPI-treated, but no control, cows had an LH surge and ovulated in response to the estradiol challenge. In experiment 2, cows were induced to LFAC as in experiment 1 and were then randomly assigned to one of four treatments 1) IPI + EB, 2) IPI + GnRH (100 microg), 3) control + EB, and 4) control + GnRH. Control and IPI-treated cows had a similar LH surge and ovulation when treated with GnRH. In contrast, only IPI-treated cows had an LH surge following EB treatment. Thus, an initial GnRH/LH surge can be induced with high estradiol, but estradiol induction of a subsequent GnRH/LH surge requires exposure to progesterone. This effect is mediated by the hypothalamus, as evidenced by similar LH release in response to exogenous GnRH. This may represent the physiological condition that underlies ovarian follicular cysts.