Testicular macrophages secrete 25-hydroxycholesterol, which can be converted to testosterone by neighboring Leydig cells. The purposes of the present studies were to determine the mode of production of this oxysterol and its long-term effects on Leydig cells. Because oxysterols are produced both enzymatically and by auto-oxidation, we first determined if testicular macrophages possess cholesterol 25-hydroxylase mRNA and/or if macrophage-secreted products oxidize cholesterol extracellularly. Rat testicular macrophages had 25-hydroxylase mRNA and converted ¹⁴C-cholesterol to ¹⁴C-25-hydroxycholesterol; however, radiolabeled cholesterol was not converted to 25-hydroxycholesterol when incubated with medium previously exposed to testicular macrophages. Exposure of Leydig cells to 10 μg/ml of 25-hydroxycholesterol, a dose within the range known to result in high basal production of testosterone when tested from 1 to 6 h, completely abolished LH responsiveness after 2 days of treatment. Because 25-hydroxycholesterol is toxic to many cell types at 1–5 μg/ml, we also studied its influence on Leydig cells during 4 days in culture using a wide range of doses. Leydig cells were highly resistant to the cytotoxic effects of 25-hydroxycholesterol, with no cells dying at 10 μg/ml and only 50% of cells affected at 100 μg/ml after 2 days of treatment. Similar conditions resulted in 100% death of a control lymphocyte cell line. These results demonstrate that 1) testicular macrophages have mRNA for cholesterol 25-hydroxylase and can convert cholesterol into 25-hydroxycholesterol, 2) macrophage-conditioned medium is not capable of auto-oxidation of cholesterol, 3) Leydig cells are highly resistant to the cytotoxic influences of 25-hydroxycholesterol, and 4) long-term treatment with high doses of 25-hydroxycholesterol results in loss of LH responsiveness. These results support the concept that testicular macrophages enzymatically produce 25-hydroxycholesterol that not only is metabolized to testosterone by Leydig cells when present at putative physiological levels but also may exert inhibitory influences on Leydig cells when present for extended periods at very high concentrations that may occur under pathological conditions.