Adult Leydig cells are derived from proliferating stem/progenitor Leydig cells in the infant testis and subsequent differentiation to steroidogenic cells in adult mice. Leydig cell proliferation in the infant testis occurs primarily in response to increased levels of LH that induce Leydig cell expression of neuregulin 1 (NRG1). Depletion of NRG1 in Nrg1 mutant mice (Nrg1(flox;flox); Cyp19a1Cre mice) dramatically reduces Leydig cell proliferation in the infant testes, leading to a reduction of testis weight, epididymial weight, and serum T in the adult mutant mice. The mutant mice are subfertile due to impaired sexual behavior and abnormal elongation of the spermatogenic cells. These defects were reversed by T treatment of the mutant mice in vivo. Furthermore, NRG1 alone induces the proliferation of Leydig cells in cultures of infant (d 10) testes obtained from mutant mice. Collectively these results show that LH induction of NRG1 directly drives the proliferation of Leydig cells in the infant testis, leading to an obligatory number of adult Leydig cells required for the production of sufficient androgen to support and maintain spermatogenesis and sexual behavior of adult male mice.