Step 1: Estrogen is the primary female sex hormone responsible for secondary sexual characteristics and regulation of the menstrual cycle.
Step 2: During the follicular phase of the menstrual cycle, developing follicles grow and mature.
Step 3: The inner lining of the Graafian follicle, called the **membrane granulosa**, contains cells that secrete estrogen.
Step 4: These granulosa cells convert androgens (from the theca interna) to estrogen using the enzyme aromatase.
Step 5: The corpus luteum secretes progesterone after ovulation, not estrogen.
\[
\Rightarrow \text{Hence, the correct answer is } \boxed{\text{(B) Membrane granulosa of Graafian follicle}}.
\]