The development of unique cell types in multicellular organisms is achieved through careful coordination of gene expression, involving signalling, transcription factors and epigenetic modifications. Tight epigenetic regulation is therefore critical for normal cell function and epigenetic modifications are often disrupted in disease, including cancer. Despite substantial influence of epigenetic modifications on cell identity and function, very little is understood about the epigenetic regulation of ovarian development or how dysregulation of epigenetic modifications contributes to ovarian dysfunction. Polycomb Repressive Complex 2 (PRC2) is a widely conserved epigenetic modifier which catalyses the repressive modification Histone 3 Lysine 27 trimethylation (H3K27me3). While PRC2 regulates cell function and identity in many developmental contexts, whether PRC2 regulates ovarian function is unknown. Using a combination of genetic and pharmacological mouse models and human granulosa tumour cells (KGN cells), we investigated how reduced PRC2 function impacts ovarian function. We demonstrate that PRC2 is essential for granulosa cell proliferation, follicular development and steroidogenesis in mouse ovaries. Further, Eed deletion resulted in aberrant expression of SOX9 in granulosa cells, suggesting PRC2 silences male-promoting genes to maintain granulosa cell identity. Additionally, the PRC2 inhibitor MAK683 reduced both H3K27me3 and proliferation of KGN cells, indicating PRC2 may also regulate proliferation in human granulosa cells and could be a useful target for treatment of specific ovarian cancers. These findings provide functional evidence that PRC2 is an essential regulator of follicle development and female endocrine regulation. Our work generates important insights into epigenetic regulation of ovarian development, with potential implications for understanding disorders of female reproductive health. This includes conditions in which granulosa cell function and steroid production are abnormal, such as granulosa cell tumours, primary ovarian insufficiency and infertility. Moreover, this work will provide insight into potential impacts of emerging PRC2 inhibiting drugs on healthy ovarian tissue and ovarian cancer cells.