The effect of a dietary supplement of calcium soaps of fatty acids on luteal steroidogenic activity was studied in sheep. Mature 3- to 5-year-old North Country Cheviot ewes were given either a pelleted control diet (C; grass, beet pulp, barley; no. = 15) providing daily, 29⋅8 g nitrogen and 13⋅7 MJ of metabolizable energy (ME) or the same diet with 5% (w/w) of the ingredients replaced with protected lipid (C + CaFA; calcium soaps of fatty acids, Megalac, Volac Etd; no. = 15) for 21 days. The latter diet provided daily 30⋅2 g nitrogen and 15⋅9 MJ ME. At the end of the feeding period the ewes were slaughtered and blood samples and ovaries were collected from individual animals. The numbers of large- (≤ 4 mm diameter) and small- to medium-sized (1 to 3 mm diameter) follicles were recorded and follicular fluids from both size groups were stored for later analyses following centrifugation. Each mature corpus luteum (CL) was isolated from its ovary and sliced to provide a pair of ca. 0⋅3 mm diameter sections. These sections (mean = 163 (s.e.12) mg) were cultured separately (4 h; 39°C; 5% CO2) in 3 ml Medium 199 in the absence or presence of 100 μIU LH. Dietary supplementation of calcium soaps of fatty acids increased progesterone concentrations in the plasma (P < 0⋅05) and follicular fluid (P < 0⋅01 and P < 0⋅05 for large and small to medium follicles, respectively); trigylcerides in plasma (P < 0⋅05); total cholesterol in plasma (P < 0⋅001) and follicular fluid (P < 0⋅001); HDL-cholesterol in plasma (P < 0⋅001) and follicular fluid (P < 0⋅01) and LDL-cholesterol in plasma (P < 0⋅01). Progesterone released by luteal tissue into the culture medium in vitro from ewes given protected lipid was higher than that from tissue of control ewes (P < 0⋅05) and supplementary LH in vitro stimulated progesterone secretion by luteal tissues from both groups (P < 0⋅05). In conclusion, a dietary supplement of calcium soaps of fatty acids altered the intra-follicular environment surrounding the oocyte and follicular cells and enhanced luteal function in sheep.