Mesenchymal stem cells (MSCs) secrete a variety of cytokines and growth factors in addition to self-renewal and multiple forms of differentiation. Some of these secreted bioactive factors could improve meiotic maturation in vitro and subsequent embryo developmental potential. The aim of the present study was to determine whether in vitro maturation (IVM) of mouse oocyte with or without cumulus cells could be improved by contact with conditioned medium (CM) of MSCs as well as the efficiency of CM to support follicular growth and oocyte maturation in the ovarian organ of mice cultured on soft agar. The developmental potential of matured oocyte was assessed by blastocyst formation after in vitro fertilization (IVF). Germinal vesicle stage oocytes with or without cumulus cells were subjected to IVM in either CM, Dulbecco's modified Eagle's medium (DMEM), alpha-minimum essential medium (alpha-MEM) or human tubal fluid (HTF). Approximately 120 oocytes were studied for each medium. CM produced a higher maturation rate (91.2%) than DMEM (54.7%), alpha-MEM (63.5%) and HTF (27.1%). Moreover, CM improved embryo development to blastocyst stage significantly more than DMEM and HTF (85 vs 7% and 41.7%, respectively) but there was no significant difference compared with alpha-MEM (85 vs 80.3%). The behavior of cortical granules of IVM oocytes cultured in CM revealed cytoplasmic maturation. Moreover, CM also supported preantral follicles growth well in organotypic culture on soft agar resulting in the maturation of 60% of them to developmentally competent oocytes. The production of estrogen progressively increased approximately 1-fold every other day during organ culture, while a dramatic 10-fold increase in progesterone was observed 17 h after human chorionic gonadotropin stimulus at the end of culture. Thus, CM is an effective medium for preantral follicle growth, oocyte maturation, and sequential embryo development.