Cystic ovarian follicles (COF) are an important ovarian dysfunction and a major cause of reproductive failure in dairy cattle. Due to the complexity of the disorder and the heterogeneity of the clinical signs, a clear definition is lacking. A follicle becomes cystic when it fails to ovulate and persists on the ovary. Despite an abundance of literature on the subject, the exact pathogenesis of COF is unclear. It is generally accepted that disruption of the hypothalamo-pituitary-gonadal axis, by endogenous and/or exogenous factors, causes cyst formation. Secretion of GnRH/LH from the hypothalamus-pituitary is aberrant, which is attributed to insensitivity of the hypothalamus-pituitary to the positive feedback effect of oestrogens. In addition, several factors can influence GnRH/LH release at the hypothalamo-pituitary level. At the ovarian level, cellular and molecular changes in the growing follicle may contribute to anovulation and cyst formation, but studying follicular changes prior to cyst formation remains extremely difficult. Differences in receptor expression between COF and dominant follicles may be an indication of the pathways involved in cyst formation. The genotypic and phenotypic link of COF with milk yield may be attributed to negative energy balance and the associated metabolic and hormonal adaptations. Altered metabolite and hormone concentrations may influence follicle growth and cyst development, both at the level of the hypothalamus-pituitary and the ovarian level.