The ability to isolate, manipulate, and transplant spermatogonial stem cells provides a unique opportunity to modify the germline. We used the rat-to-nude mouse transplantation assay to characterize spermatogonial stem cell activity in rat testes and in culture. Our results indicate that rat spermatogonial stem cells can survive and proliferate in short-term culture, although a net loss of stem cells was observed. Rat spermatogonial stem cells also were susceptible to transduction with a retroviral vector carrying a lacZ reporter transgene. Using a 3-day periodic infection protocol, 0.5% of stem cells originally cultured were transduced and produced transgenic colonies of spermatogenesis in recipient mouse testes. The level of transgenic donor-derived spermatogenesis observed in the rat-to-mouse transplantation was similar to levels that produced transgenic progeny in the mouse-to-mouse transplantation. This work provides a basis for understanding the biology of rat spermatogonial stem cells. Development of an optimal rat recipient testis model and application of these methods for germline modification will enable the production of transgenic rats, potentially valuable tools for evaluating genes and their functions. In addition, these methods may be applicable in other species where existing transgenic methods are inefficient or not available.