Leydig cells of the adult rat testis differentiate postnatally from spindle-shaped cells in the testis interstitium during the neonatal-prepubertal period. Which spindle-shaped cell types are the precursor for Leydig cells and the stimulus for initiation of their differentiation are, however, two unresolved issues. In the present study, our objectives were to identify unequivocally which spindle-shaped cells are the precursors to Leydig cells and to test whether the initiation of their differentiation into Leydig cells depends on LH. Testes from fifteen groups of Sprague-Dawley rats (n = 4 per group) from 7–21 days of age were fixed in Bouin solution and embedded in paraffin. Immunoexpression of 3β-hydroxysteroid dehydrogenase (3βHSD), cytochrome P450 side-chain cleavage (P450_scc), 17α-hydroxylase cytochrome P450 (P450_c17), and LH receptors (LHR) in interstitial cells (other than fetal Leydig cells) was observed using the avidin biotin method. Of all spindle-shaped cell types in the testis interstitium, only the peritubular mesenchymal cells showed positive immunolabeling for all three steroidogenic enzymes, beginning from the 11th postnatal day. All three enzymes were expressed simultaneously in these cells, and their numbers increased significantly thereafter. Immunoexpression of LHR in a few of these cells was just evident for the first time on postnatal Day 12 (i.e., after acquiring the steroidogenic enzyme activity). Their numbers gradually increased with time. The number of immunolabeled cells per 1000 interstitial cells (excluding fetal Leydig cells and capillary endothelial cells) was not significantly different for the three steroidogenic enzymes tested at all ages; however, a lower value was observed for LHR at each time-point. Based on these observations, we suggest that 1) the precursor cell type for the adult generation of Leydig cells in the postnatal rat testis is the peritubular mesenchymal cells, 2) precursor cells acquire 3β-HSD, P450_scc, and P450_c17 enzyme activity simultaneously during Leydig cell differentiation, and 3) onset of precursor cell differentiation during Leydig cell development does not depend on LH.