Growth differentiation factor 9 (GDF9) is an oocyte-expressed member of the transforming growth factor beta (TGF-beta) superfamily and is required for normal ovarian follicle development and female fertility. GDF9 acts as a paracrine factor and affects granulosa cell physiology. Only a few genes regulated by GDF9 are known. Our microarray analysis has identified gremlin as one of the genes up-regulated by GDF9 in cultures of granulosa cells. Gremlin is a known member of the DAN family of bone morphogenetic protein (BMP) antagonists, but its expression and function in the ovary are unknown. We have investigated the regulation of gremlin in mouse granulosa cells by GDF9 as well as other members of the TGF-beta superfamily. GDF9 and BMP4 induce gremlin, but TGF-beta does not. In addition, in cultures of granulosa cells, gremlin negatively regulates BMP4 signaling but not GDF9 activity. The expression of gremlin in the ovary was also examined by in situ hybridization. A distinct change in gremlin mRNA compartmentalization occurs during follicle development and ovulation, indicating a highly regulated expression pattern during folliculogenesis. We propose that gremlin modulates the cross-talk between GDF9 and BMP signaling that is necessary during follicle development because both ligands use components of the same signaling pathway.