Establishment of spermatogonia throughout the fetal and postnatal period is essential for production of spermatozoa and male fertility. Here, we establish a protocol for in vitro reconstitution of human prospermatogonial specification whereby human primordial germ cell (PGC)-like cells differentiated from human induced pluripotent stem cells are further induced into M-prospermatogonia-like cells and T1 prospermatogonia-like cells (T1LCs) using long-term cultured xenogeneic reconstituted testes. Single cell RNA-sequencing is used to delineate the lineage trajectory leading to T1LCs, which closely resemble human T1-prospermatogonia in vivo and exhibit gene expression related to spermatogenesis and diminished proliferation, a hallmark of quiescent T1 prospermatogonia. Notably, this system enables us to visualize the dynamic and stage-specific regulation of transposable elements during human prospermatogonial specification. Together, our findings pave the way for understanding and reconstructing human male germline development in vitro.