Ectopic grafting of testicular tissue is a promising new approach that can be used to preserve testicular function. This technique has been used recently to differentiate the neonatal testes of different species, up to the level of complete spermatogenesis. This approach can be applied successfully to generate live progeny using sperm extracted from grafts originating from testes of newborn donors. The sperm are capable of supporting normal development and producing fertile male and female offspring after intracytoplasmic injection into mouse oocytes and embryo transfer into surrogate mothers. The grafted tissue was also capable of significantly normalizing reproductive hormone levels in the castrated recipients. This technique presents new avenues for experimentation. The recipient mouse can be regarded as a living incubator and a culture system of testicular tissue, allowing the experimental manipulation of several aspects of testis development and spermatogenesis. The successful generation of pups indicates that this technqiue can be used to study the testicular phenotype and to breed mutant or transgenic mouse strains with lethal postnatal phenotypes. The ability to generate sperm from the germ line ex vivo also paves the way for the development of new strategies for preserving fertility in boys undergoing cancer therapy.