Previous studies suggest that underlying ovarian stromal cues may regulate the ovarian surface epithelium. However, little is known about the interaction between ovarian stromal cells (OSC) and ovarian surface epithelial cells (OSE) under normal physiologic and pathologic conditions, largely because of the lack of a suitable model. In the current study, the OSC obtained from a sheep were immortalized with SV-40 T/t antigen (designated IOSC) and telomerase reverse transcriptase (designated IOSCH), followed by transfection with the oncogenic allele of the human H-Ras oncogene (designated IOSChR). IOSC cells transfected with H-Ras before immortalization with telomerase were designated IOSCRH. These sheep OSCs were used in both in vitro and in vivo model systems to evaluate mechanisms by which OSCs influence ovarian tumor progression. Normal sheep OSCs were found to inhibit the growth of SKOV3 and OVCAR3 human ovarian cancer cells, but not normal sheep OSE and human OSE cells (hOSE137 cells). In contrast, IOSChR and IOSCRH cells stimulated the growth of normal sheep and human OSE cells, as well as cancer cells. These findings were confirmed by in vivo studies. Our data provide compelling support for the importance of stromal-epithelial cell interactions during tumor progression, and show for the first time that immortalized and transformed OSCs promote growth of ovarian epithelial tumors. © 2007 Wiley-Liss, Inc.