In the ovary, the steroid hormone estrogen and the TGF-β superfamily member activin are both produced by granulosa cells and they both have intraovarian functions. Emerging evidence has indicated an interaction of these two signaling pathways. Based on the fact that estrogen and activin can impact early follicle formation and development, we hypothesize that estrogen treatment may alter activin signaling in the neonatal ovary. Therefore, this study was designed to examine the effect of neonatal diethylstilbestrol (DES) and estradiol (E₂) exposure on the mRNA and protein levels of the key factors involved in activin signaling in the mouse ovary. CD-1 mouse pups were given daily injections of DES, E₂, or oil on postnatal d 1–5, and ovaries and sera were collected on d 19. Neonatal DES or E₂ exposure decreased the number of small antral follicles, induced multioocytic follicle formation, and decreased activin β-subunit mRNA and protein levels. Consistent with local loss of β-subunit expression, the phosphorylation of Smad 2, a marker of activin-dependent signaling, was decreased in the estrogen-treated ovaries. The decreased β-subunit expression resulted in a decrease in serum inhibin levels, with a corresponding increase in FSH. Estrogen also suppressed activin subunit gene promoter activities, suggesting a direct transcriptional effect. Overall, this study demonstrates that activin subunits are targets of estrogen action in the early mouse ovary.