Testicular steroidogenesis in the fetal rat is activated before the onset of pituitary gonadotropin secretion. We studied here whether the pituitary adenylate cyclase-activating polypeptide (PACAP) could regulate this early Leydig cell activity. Effects of the two PACAP forms, 27 and 38, were studied on cAMP and testosterone production of dispersed Leydig cells of embryonic Day (E) 18.5. Furthermore, PACAP and PACAP type I receptor mRNA expression were measured by reverse transcription-polymerase chain reaction (RT-PCR), and testicular PACAP concentations by RIA. The two peptides were highly potent stimulators of fetal testes. Doses as low as 10⁻¹⁸ mol/L of PACAP-27 and 10⁻¹⁷–10⁻¹⁶ mol/L of PACAP-38 significantly stimulated cAMP and testosterone production, with magnitude comparable to that evoked by hCG. These effects were specific for fetal Leydig cells, because PACAP-responsive control cells, including murine Sertoli and granulosa cell lines, only responded to concentrations ≥10⁻¹² mol/L. By RT-PCR, PACAP and its type I receptor mRNAs were expressed in fetal testis as early as E15.5. By Northern hybridization, PACAP mRNA was first detectable on Day 30 postpartum and increased thereafter. Both forms of PACAP peptides were clearly detectable in E17.5 testes, with decreasing levels thereafter. In conclusion, the steroidogenesis of fetal rat Leydig cells responds to very low concentrations of PACAP, which may be an important physiological regulator of this activity before the onset of pituitary LH secretion.