Studies were conducted to define further the development of the gonadotropin induced, E2 mediated steroidogenic lesion (17-alpha-hydroxylase/17,20-desmolase) in fetal Leydig cell cultures. Analysis of dispersed fetal testes purified by centrifugal elutriation demonstrated a group of cells with sedimentation velocity 12 less than to less than 16.8 mm/h.g containing a small population of adult like "transitional" Leydig cells and homogeneous "fetal" Leydig cell population collected at greater than 19.3 mm/h.g. After cells were cultured for 3 days with addition of 1 microgram oLH at 3 day intervals, the transitional cells showed testosterone accumulation comparable to the fetal cells. In contrast, transitional cells had 10-fold higher basal and hCG-stimulated aromatase activity than fetal cells, and a lack of testosterone response to acute (3 h) hCG stimulation. At day 6, transitional cells steroidogenic ability declined markedly. The fetal population maintained in culture with LH additions every 3 days, showed typical immature Leydig cell response, with enhancement of acute testosterone response to hCG at 3 day (1-fold) and at 6 day of culture (5-fold). Higher doses of LH (5 micrograms/day) or daily treatment of 1 microgram to fetal cultures, induced a lesion of 17 alpha-hydroxylase/17,20-desmolase with reduction of enzymatic activities (P less than 0.01) and impaired testosterone production (P less than 0.01) in response to acute hCG stimulation. Also aromatase was stimulated by hCG + 140% and 50% and E2 receptors were increased by 100 and 180% at 3 days and 6 days of cultures with daily or high dose LH addition, findings consistent with the observation of the E2-mediated lesion during LH action. In conclusion, the cultured fetal Leydig cell provides a useful model to elucidate molecular mechanisms involved in the development of gonadotropin-induced estradiol-mediated desensitization. Treatment of fetal Leydig cell cultures with multiple or frequent doses of LH elevate aromatase activity to necessary levels for the induction of desensitization. We have isolated small population of transitional Leydig cells with morphological characteristics of cells found in 15 day post-natal testis but functional capabilities of adult cells. We have also demonstrated the emergence of a functional adult-like population from the fetal Leydig cell.