Our studies have demonstrated that in the fetal rat Leydig cell, estradiol causes an up-regulation of its receptor and an induction of the regulatory mechanism (late steroidogenic lesion) that is similar to that observed in the adult rat Leydig cell. The absence of this regulation in fetal life is due to a very low level of aromatization capacity, with lack of up-regulation and/or induction of estrogen receptor by estradiol. Higher doses or frequent administration of LH is able to elevate aromatase activity and consequent E2-receptor-mediated action for the induction of gonadotropin-mediated desensitization in fetal cells. Our studies have revealed a small population of adult-like Leydig cells in the fetal testis and the emergence of a functional adult-like population from the fetal Leydig cell induced by gonadotropin treatment. The in vitro fetal Leydig cell culture system has permitted the analysis of cellular actions of gonadotropin with particular reference to the role of tropic hormone and estrogen in the development of late steroidogenic lesions during Leydig cell maturation. Future research with this system will help to clarify further the modulatory mechanisms responsible for emergence of the adult cell population.