TGFβ1 is implicated in regulation of ovarian function and the events of early pregnancy. We have investigated the effect of null mutation in the Tgfβ1 gene on reproductive function in female mice. The reproductive capacity of TGFβ1 null mutant females was severely impaired, leading to almost complete infertility. Onset of sexual maturity was delayed, after which ovarian function was disrupted, with extended ovarian cycles, irregular ovulation, and a 40% reduction in oocytes ovulated. Serum FSH and estrogen content were normal, but TGFβ1 null mutant mice failed to display the characteristic proestrus surge in circulating LH. Ovarian hyperstimulation with exogenous gonadotropins elicited normal ovulation rates in TGFβ1 null mutant mice. After mating with wild-type stud males, serum progesterone content was reduced by 75% associated with altered ovarian expression of mRNAs encoding steroidogenic enzymes 3β-hydroxysteroid dehydrogenase-1 and P450 17 α-hydroxylase/C17–20-lyase. Embryos recovered from TGFβ1 null mutant females were developmentally arrested in the morula stage and rarely progressed to blastocysts. Attempts to rescue embryos by exogenous progesterone administration and in vitro culture were unsuccessful, and in vitro fertilization and culture experiments demonstrated that impaired development is unlikely to result from lack of maternal tract TGFβ1. We conclude that embryo arrest is due to developmental incompetence in oocytes developed in a TGFβ1-deficient follicular environment. This study demonstrates that TGFβ1 is a critical determinant of normal ovarian function, operating through regulation of LH activity and generation of oocytes competent for embryonic development and successful initiation of pregnancy.