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 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, and tissue patterning, the epigenetic regulation of ovarian development or how dysregulation of epigenetic modifications contributes to ovarian dysfunction is poorly understood. 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, how PRC2 regulates ovarian function is poorly understood. Using genetic and pharmacological mouse models and human granulosa tumour cells (KGN cells), we investigated how reduced PRC2 function impacts ovarian function. Combining immunofluorescence and spatial transcriptomics we demonstrate that PRC2 is essential for granulosa cell proliferation and follicular development 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 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 provides insight into potential impacts of emerging PRC2 inhibiting drugs on ovarian function and ovarian cancer cells.