Infections of the uterus or mammary gland with Gram-negative bacteria cause infertility in cattle, during disease and for some time afterward. Even though these infections are in organs distant from the ovary, metritis and mastitis perturb antral follicle development and function in vivo, while LPS accumulates inthe follicular fluid. It is not known whether infection impacts early follicular development and oocyte quality, or if granulosa cells have the ability to mount an innate immune response to bacterial components. We tested the hypothesis that LPS perturbs ovarian follicle development, causes granulosa cell inflammation and impacts oocyte quality. Exposure of bovine ovarian cortex ex vivo to LPS reduced primordial follicle number, associated with increased primordial follicle activation. Ovarian cortex culture supernatants accumulated the inflammatory mediators IL-1β, IL-6 and IL-8 in a LPS concentration-dependent manner. In addition, LPS exposure modulated key intracellular regulators of follicle activation, with loss of primordial follicle PTEN and cytoplasmic translocation of FOXO3. Granulosa cells from antral follicles prior to dominance elicited an inflammatory response to LPS and other bacterial components with accumulation of IL-6 and IL-8, in a time- and dose-dependent manner. Granulosa cells responded acutely to LPS with rapid phosphorylation of TLR signaling components, p38 and ERK, and increased expression of IL6 and IL8 mRNA. Targeting TLR4 with siRNA attenuated granulosa cell accumulation of IL-6 in response to LPS. Furthermore, LPS stimulated a gonadotrophin-independent expansion of cumulus-oocyte complexes, and increased meiotic arrest and germinal vesicle breakdown failure in oocytes. In conclusion, LPS reduced the primordial follicle pool in bovine ovarian cortex ex vivo and produced an inflammatory response in granulosa cells leading to decreased oocyte quality. These observations provide an insight into how bacterial infections distant from the ovary have long term effects on fertility.