We have recently succeeded in immortalizing rat granulosa cells by co-transfection with SV-40 DNA and the Ha-ras oncogene. These cells lost their response to gonadotropins, but expressed the cytochrome P450scc mitochondrial system enzymes and produced progesterone and 20 alpha-hydroxy-4-pregnan-3-one (20 alpha-OH-P) upon cAMP stimulation (Suh, B. S., and A. Amsterdam. 1990. Endocrinology. 127:2489-2500; Hanukoglu, I., B. S. Suh, S. Himmelhoch, and A. Amsterdam. 1990. J. Cell Biol. 111:1973-1981). In an attempt to restore the steroidogenic response to gonadotropins in immortalized cells, lutropin/choriogonadotropin (LH/CG-R) receptor expression plasmid was prepared by introducing the complete coding region of LH receptor cDNA (McFarland, K. C., R. Sprengel, H. S. Phillips, M. Köhler, N. Rosemblit, K. Nikolics, D. L. Segaloff, and P. H. Seeburg. 1989. Science (Wash. DC). 245:494-499) into a SV-40 early promoter based eucaryotic expression vector. Granulosa cells from preovulatory follicles were transfected with this LH receptor expression plasmid, together with SV-40 DNA and the Ha-ras oncogene. Cell lines obtained after this triple transfection accumulated cAMP in a dose-dependent manner in response to hCG. Moreover, they produced progesterone and 20 alpha-OH-P upon hCG stimulation with an ED50 of 125 pM and 75 pM, respectively, which is within the physiological range. Concomitantly with hCG induced differentiation, inhibition of cell proliferation was evident following stimulation with hormone concentrations as low as 40 pM. The number of hCG receptor sites per cell after numerous passages and several freezing and thawing cycles was 1.9 x 10(4), they showed a Kd of 180 pM. Stimulation with hCG induced pronounced morphological and biochemical changes in these cells including formation of mitochondrial located adrenodoxin, a marker enzyme for enhanced steroidogenesis. These findings make possible the expression in immortalized granulosa cells, of selectively mutated receptor molecules which preserve their steroidogenic potential, thereby opening the way to analysis of structure-function relationships of the receptor molecule.