Prenatal testosterone (T) excess during midgestation leads to estrous cycle defects and polycystic ovaries in sheep. We hypothesized that follicular persistence causes polycystic ovaries and that cyclic progesterone (P) treatment would overcome follicular persistence and restore cyclicity. Twice-weekly blood samples for P measurements were taken from control (C; n = 16) and prenatally T-treated (T60; n = 14; 100 mg T, im, twice weekly from d 30-90 of gestation) Suffolk sheep starting before the onset of puberty and continuing through the second breeding season. A subset of C and T60 sheep were treated cyclically with a modified controlled internal drug-releasing device for 13-14 d every 17 d during the first anestrus (CP, 7; TP, 6). Transrectal ovarian ultrasonography was performed for 8 d in the first and 21 d in the second breeding season. Prenatal T excess reduced the number, but increased the duration of progestogenic cycles, reduced the proportion of ewes with normal cycles, increased the proportion of ewes with subluteal cycles, decreased the proportion of ewes with ovulatory cycles, induced the occurrence of persistent follicles, and reduced the number of corpora lutea in those that cycled. Cyclic P treatment in anestrus, which produced one third the P concentration seen during luteal phase of cycle, did not reduce the number of persistent follicles, but increased the number of progestogenic cycles while reducing their duration. These findings suggested that follicular persistence might contribute to the polycystic ovarian morphology. Cyclic P treatment was able to only partially restore follicular dynamics, but this may be related to the low replacement concentrations of P achieved.