Elevated oestradiol concentrations during the follicular phase stimulate a surge in gonadotropin-releasing hormone (GnRH) and luteinising hormone (LH) concentrations, which leads to ovulation. Progesterone can block the oestradiol-induced GnRH/LH surge, but the mechanism that is involved is unclear. We examined the effect of progesterone on oestradiol-induced activation of cells within the ovine hypothalamus/preoptic area (POA) to determine: (i) in which regions progesterone acts to block the GnRH/LH surge and (ii) whether progesterone directly or indirectly prevents activation of oestradiol-responsive cells. Cellular activation was assessed by measuring the number of cells that expressed Fos (an immediate early gene). Exposure to increased oestradiol concentrations in the absence of progesterone (which normally stimulates a LH surge) did not cause any region-specific changes in hypothalamic Fos expression during the activation stage of the LH surge-induction process (Experiment 1). The same treatment significantly increased cellular activation within the POA, lateral septum (LS), and arcuate nucleus at the time of surge onset (Experiment 2). Concurrent exposure to increased oestradiol and progesterone concentrations during the activation stage of the surge-induction process (which normally blocks the LH surge) was associated with significantly reduced cellular activation within the ventromedial hypothalamus and anterior hypothalamic area, relative to the positive controls (oestradiol increment alone) and arcuate nucleus relative to the negative controls (no increment in oestradiol) during the activation stage (Experiment 1). At the time of surge onset (Experiment 2), exposure to progesterone during the activation period prevented the oestradiol-induced increase in cellular activation that occurred in the POA, LS and arcuate nucleus of the positive controls. These results demonstrated that oestradiol and progesterone induced differential region- and time-specific effects on cellular activation within the regions of the ovine brain that generate the preovulatory GnRH/LH surge. Moreover, the lack of cellular activation within the POA, LS and arcuate nucleus at the time of surge onset in animals exposed to progesterone during the activation stage is consistent with the hypothesis that progesterone can block the preovulatory surge by direct inhibition of oestradiol-induced cellular activation in these areas.