The continuous production of mammalian sperm is maintained by the proliferation and differentiation of spermatogonial stem cells, which originate from primordial germ cells in the early embryo. Previously, we reported that the transplantation of fetal male gonadal tissue into the recipient testis was effective obtaining functional sperm. This transplantation technique is a promising new approach for the preservation of testicular function in a mutant animal with embryonic lethality. In the present study, we examined whether spermatogenesis from fetal male germ cells is induced under ectopic conditions in male and female recipients. Nine to 10 weeks after the transplantation of male gonads prepared from embryos at 12.5 or 16.5 days post gestation, male germ cell differentiation occurred under the skin of male and female recipient nude mice. Histological analyses revealed that grafted gonads contained haploid germ cells such as round or elongated spermatids. Furthermore, we succeeded in obtaining normal progeny by injecting the ectopically produced round spermatids into the cytoplasm of oocytes, even when the male germ cells had been generated in female recipients. These results indicate that the transplantation of fetal male gonads under the skin of recipient mice is a useful technique for obtaining functional male gametes.