Androgens are essential for the normal function of mature antral follicles but also have a role in the early stages of follicle development. Polycystic ovary syndrome (PCOS), the most common cause of anovulatory infertility, is characterized by androgen excess and aberrant follicle development that includes accelerated early follicle growth. We have examined the effects of testosterone and dihydrotestosterone (DHT) on development of isolated mouse preantral follicles in culture with the specific aim of investigating interaction with follicle-stimulating hormone (FSH), the steroidogenic pathway, and growth factors of the TGFβ superfamily that are known to have a role in early follicle development. Both testosterone and DHT stimulated follicle growth and augmented FSH-induced growth and increased the incidence of antrum formation among the granulosa cell layers of these preantral follicles after 72 hours in culture. Effects of both androgens were reversed by the androgen receptor antagonist flutamide. FSH receptor expression was increased in response to both testosterone and DHT, as was that of Star, whereas Cyp11a1 was down-regulated. The key androgen-induced changes in the TGFβ signaling pathway were down-regulation of Amh, Bmp15, and their receptors. Inhibition of Alk6 (Bmpr1b), a putative partner for Amhr2 and Bmpr2, by dorsomorphin resulted in augmentation of androgen-stimulated growth and modification of androgen-induced gene expression. Our findings point to varied effects of androgen on preantral follicle growth and function, including interaction with FSH-activated growth and steroidogenesis, and, importantly, implicate the intrafollicular TGFβ system as a key mediator of androgen action. These findings provide insight into abnormal early follicle development in PCOS.