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The importance of endocrine signals in the regulation of follicular development has long been recognized. However, the follicular microenvironment also plays a critical role in determining follicular fate. This review summarizes our studies on the role of the intrafollicular IGF system in selection of the dominant follicle (DF) in cattle. During the bovine estrous cycle, the largest antral follicles develop in two or three successive waves of follicular recruitment and selection of a DF. High concentrations of estradiol in the follicular fluid are the hallmark of dominant and preovulatory follicles and are associated with lower concentrations of low molecular weight (MW) insulin-like growth factor binding proteins (IGFBP-2, -4, and -5), which can prevent binding of IGF to its receptor. Our studies have shown that dominant and preovulatory follicles also have much higher levels of an IGFBP-4/-5 protease activity, which is the bovine equivalent of the human IGFBP-4 protease, pregnancy-associated plasma protein-A (PAPP-A). Studies of follicles isolated just after the emergence of the DF showed that PAPP-A is present in the follicular fluid of the DF as soon as it can be detected as morphologically dominant. To examine whether higher levels of PAPP-A in one follicle of the cohort (the future DF) precedes morphological dominance, the four largest follicles were isolated from pairs of bovine ovaries obtained before one follicle of the cohort was significantly larger the others, around the time that one follicle was first detected as morphologically dominant and after dominance was well established. Analysis of the temporal sequence of changes in estradiol, low MW IGFBPs, free IGF, and PAPP-A in the follicular fluid suggested that an increase in PAPP-A is the earliest biochemical difference yet detected in the future DF and that follicular selection is the result of a progressive series of changes beginning with the acquisition of PAPP-A, which leads to a decrease in IGFBP-4 and -5 and an increase in free IGF, which synergizes with FSH to increase estradiol production. Co-dominant follicles, induced by injection of small doses of recombinant bovine (rb) FSH, both had levels of PAPP-A similar to the single DF of control heifers, supporting the hypothesized role of FSH in the induction of PAPP-A in the DF. Taken together, these results suggest a critical role for FSH-induced PAPP-A, and thus for free IGF, in the selection of the DF. In contrast, other experiments provided evidence for a deleterious effect of IGF on the initiation of bovine follicular growth and the survival of primordial and primary follicles in vitro. These results underscore the importance of the follicular microenvironment in determining follicular fate and indicate that its effects can be stage-specific.