Female fertility requires normal ovarian follicular growth and ovulation. The nuclear receptor liver receptor homolog 1 has been implicated in processes as diverse as bile acid metabolism, steroidogenesis, and cell proliferation. In the ovary, Lrh1 is expressed exclusively in granulosa and luteal cells. Using somatic targeted mutagenesis, we show that mice lacking Lrh1 in granulosa cells are sterile, due to anovulation. The preovulatory stimulus fails to elicit cumulus expansion, luteinization, and follicular rupture in these mice. Multiple defects, including severely reduced transactivation of the Lrh1 target gene, nitric oxide synthase 3, leads to increased intrafollicular estradiol levels in the absence of Lrh1. This further causes dysfunction of prostaglandin and hyaluronic acid cascades and interrupts cumulus expansion. Lack of Lrh1 also interferes with progesterone synthesis because of failure of normal expression of the Lrh1 targets, steroidogenic acute regulatory protein and cytochrome P450 side-chain cleavage. In addition, expression of extracellular matrix proteases essential for ovulation is compromised. These results demonstrate that Lrh1 is a regulator of multiple mechanisms essential for maturation of ovarian follicles and for ovulation. Lrh1 is therefore a key modulator of female fertility and a potential target for contraception.