Polycystic ovary syndrome is the most common cause of anovulatory infertility. It has long-term health implications and is an important risk factor for type 2 diabetes. However, little is known about the cause of polycystic ovaries. We have used detailed morphological analysis to assess the hypothesis that there is an intrinsic ovarian abnormality that affects the earliest stages of follicular development. We took small cortical biopsies during routine laparoscopy from 24 women with normal ovaries and regular cycles and from 32 women with polycystic ovaries, 16 of whom had regular, ovulatory cycles and 16 of whom had oligomenorrhoea. We used computerised image analysis to assess the density and developmental stage of small preantral follicles in serial sections of fixed tissue. Median density of small preantral follicles, including those at primordial and primary stages, was six-fold greater in biopsies from polycystic ovaries in anovulatory women than in normal ovaries (p=0.009). In both ovulatory and anovulatory women with polycystic ovaries, we noted a significant increase in the percentage of early growing (primary) follicles and a reciprocal decrease in the proportion of primordial follicles compared with normal ovaries. Our findings indicate that there are fundamental differences between polycystic and normal ovaries in early follicular development, suggesting an intrinsic ovarian abnormality. The increased density of small preantral follicles in polycystic ovaries could result from increased population of the fetal ovary by germ cells, or from decreased rate of loss of oocytes during late gestation, childhood, and puberty.