The corpus luteum is a temporary endocrine structure that forms in the ovary after an egg is released during ovulation. It develops from the remnants of the follicle that housed the egg and plays a crucial role in regulating the menstrual cycle and early pregnancy. This structure produces hormones, primarily progesterone, which helps prepare the uterine lining for a potential pregnancy. If fertilization does not occur, the corpus luteum degenerates into a scar-like structure called the corpus albicans, leading to a decrease in hormone levels and the onset of menstruation.