Follistatin plays an important role in female physiology by regulating FSH levels through blocking activin actions. Failure to regulate FSH has been implicated as a potential cause of premature ovarian failure. Premature ovarian failure is characterized by amenorrhea, infertility, and elevated gonadotropin levels in women under the age of 40. Because follistatin is essential for postnatal viability, we designed a cre/loxP conditional knockout system to render the follistatin gene null specifically in the granulosa cells of the postnatal ovary using Amhr2cre transgenic mice. The follistatin conditional knockout females develop fertility defects, including reduced litter number and litter sizes and, in the most severe case, infertility. Reduced numbers of ovarian follicles, ovulation and fertilization defects, elevated levels of serum FSH and LH, and reduced levels of testosterone were observed in these mice. These findings demonstrate that compromising granulosa cell follistatin function leads to findings similar to those characterized in premature ovarian failure. Follistatin conditional knockouts may therefore be a useful model with which to further study this human syndrome. These studies are the first report of a granulosa cell-specific deletion of a gene in the postnatal ovary and have important implications for future endeavors to generate ovary-specific knockout mouse models.