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Proliferation, apoptosis, and steroid hormone secretion by granulosa cells (GCs) and theca cells (TCs) are essential for maintaining the fate of chicken follicles. Our previous study showed that the Wnt inhibitor factor 1 (<i>WIF1</i>) plays a role in follicle selection. However, the significance of <i>WIF1</i> in GC- and TC-associated follicular development was not explicitly investigated. This study found that <i>WIF1</i> expression was strongly downregulated during follicle selection (<i>p</i> < 0.05) and was significantly higher in GCs than in TCs (<i>p</i> < 0.05). <i>WIF1</i> inhibits proliferation and promotes apoptosis in GCs. Additionally, it promotes progesterone secretion in prehierarchal GCs (pre-GCs, 1.16 ± 0.05 ng/mg vs. 1.58 ng/mg ± 0.12, <i>p</i> < 0.05) and hierarchal GCs (hie-GCs, 395.00 ng/mg ± 34.73 vs. 527.77 ng/mg ± 27.19, <i>p</i> < 0.05) with the participation of the follicle-stimulating hormone (FSH). <i>WIF1</i> affected canonical Wnt pathways and phosphorylated β-catenin expression in GCs. Furthermore, 604 upregulated differentially expressed genes (DEGs) and 360 downregulated DEGs in <i>WIF1</i>-overexpressed GCs were found through RNA-seq analysis (criteria: |<inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><mrow><mrow><mrow><msub><mrow><mi mathvariant="normal">log</mi></mrow><mrow><mn>2</mn></mrow></msub></mrow><mo>⁡</mo><mrow><mo>(</mo><mi mathvariant="normal">F</mi><mi mathvariant="normal">o</mi><mi mathvariant="normal">l</mi><mi mathvariant="normal">d</mi><mi mathvariant="normal">C</mi><mi mathvariant="normal">h</mi><mi mathvariant="normal">a</mi><mi mathvariant="normal">n</mi><mi mathvariant="normal">g</mi><mi mathvariant="normal">e</mi><mo>)</mo></mrow></mrow></mrow></semantics></math></inline-formula>| > 1 and <i>p</i>_adj < 0.05). Cytokine–cytokine receptor interaction and the steroid hormone biosynthesis pathway were identified. In addition, the transcript of estrogen receptor 2 (<i>ESR2</i>) increased significantly (<inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><mrow><mrow><mrow><msub><mrow><mi>log</mi></mrow><mrow><mn>2</mn></mrow></msub></mrow><mo>⁡</mo><mrow><mo>(</mo><mi mathvariant="normal">F</mi><mi mathvariant="normal">o</mi><mi mathvariant="normal">l</mi><mi mathvariant="normal">d</mi><mi mathvariant="normal">C</mi><mi mathvariant="normal">h</mi><mi mathvariant="normal">a</mi><mi mathvariant="normal">n</mi><mi mathvariant="normal">g</mi><mi mathvariant="normal">e</mi><mo>)</mo></mrow></mrow></mrow></semantics></math></inline-formula> = 1.27, <i>p</i>_adj < 0.05). Furthermore, we found that <i>WIF1</i> regulated progesterone synthesis by upregulating <i>ESR2</i> expression in GCs. Additionally, <i>WIF1</i> suppressed proliferation and promoted apoptosis in TCs. Taken together, these results reveal that <i>WIF1</i> stimulates follicle development by promoting GC differentiation and progesterone synthesis, which provides an insight into the molecular mechanism of follicle selection and egg-laying performance in poultry.