The mechanisms associated with follicular activation and early growth are not well understood in avian species. Level of mRNA transcripts involved in steroidogenesis (STAR, HSD3B, CYP11A1, CYP19), paracrine signaling (AMH, BMP2, BMP4, BMP6, KITL, WNT4, and PCSK6) and transcription (SMAD1, SMAD2, SMAD3, SMAD5, SMAD9, FOXL3, FOXL2, NR5A1 (SF1), and WT1) were determined in small avian follicles 0.5, 1, and 2 mm in diameter after oocyte removal. STAR, HSD3B, CYP11A1, CYP19, PCSK6, FOXO3, and KITL mRNA increased 2- to 45-fold, while FOXL2, WT1, and WNT4 decreased 30–90% and NR5A1 did not change as follicles developed from 0.5 to 2 mm. Phosphorylated SMAD2, SMAD3, SMAD1/5/9 and FOXO3 proteins were found in both granulosa cells and oocytes of small (<0.5 mm) and larger (>1 mm) follicles. In contrast, non-phosphorylated FOXO3 protein was found in oocyte and granulosa cells of small follicles, but only in the oocyte of larger follicles. Culture of small avian follicles on the chorioallantoic membrane of chick embryos (in ovo) for 7 days caused changes in transcript levels that were similar to changes observed in vivo. The collective findings suggest that the growth of avian follicles from 0.5 to 2 mm is marked by an increase in steroidogenic capacity, and changes in paracrine signaling that may be important during early avian follicular development. Thus, a number of candidate marker genes were identified, and a method of follicle culture was developed to study early follicular development in a model avian species. Mol. Reprod. Dev. 78:212–223, 2011. © 2011 Wiley-Liss, Inc.