The influence of germ cells (pachytene spermatocytes and round spermatids) on the secretion by Sertoli cells of the proteinaceous factor(s) which stimulates Leydig cell steroid biosynthesis was investigated. Sertoli cells from immature rats were cultured on plastic dishes or on Millipore filters impregnated with reconstituted basement membrane in bicameral chambers. Immature rat Sertoli cell secreted proteins (rSCSP; MW > 10,000), from conventional cultures, stimulated 4- to 5-fold steroid biosynthesis in normal rat and MA-10 mouse tumor Leydig cells, respectively. MA-10 cells were then used as a bioassay system for most studies, although purified rat Leydig cells were used in some cases to further confirm results obtained with MA-10 cells. rSCSP collected from both the apical and basal compartment of the chambers were examined for their ability to stimulate Leydig cell steroidogenesis. The Leydig cell stimulatory activity from Sertoli cells was found to be secreted in a polarized manner, with 80% of the total bioactivity found in the basal rSCSP. Addition of pachytene spermatocyte proteins (PSP) in the apical compartment of the chambers inhibited, in a time- and concentration-dependent manner, the basally directed Sertoli cell secretion of the Leydig cell stimulatory protein(s) by 85%. Similar results were obtained when freshly isolated pachytene spermatocytes were directly added on top of Sertoli cell epithelial sheets in the apical compartment of the chambers. In contrast, round spermatid proteins (RSP) did not exhibit a comparable effect to that of PSP in regulating theSertoli cell secretion of the Leydig cell stimulatory activity. These results demonstrate that the Sertoli cell secreted protein(s) which stimulates Leydig cell steroid biosynthesis is secreted in a basally polarized direction, and its secretion is specifically modulated by pachytene spermatocytes.