Betaglycan (Tgfbr3) is a coreceptor for transforming growth factor-beta (TGFB) superfamily ligands. In the current study, a defect in seminiferous cord formation was detected in 12.5–13.5 days postcoitum (dpc) betaglycan null murine testis. Immunohistochemistry with antibodies against cell-specific markers revealed defects in somatic cell populations. To confirm these data, quantitative real-time PCR was performed to determine changes in the expression levels of genes involved in fetal testis cell differentiation and function. The expression levels of the Leydig cell markers Insl3, Cyp17a1, Cyp11a1, Star, and Hsd3b1 were reduced in knockout testis compared to wild-type testis, beginning at 12.5 dpc. Whole mount in situ hybridization confirmed that Cyp11a1 expression was reduced in the null testis, but its distribution pattern was unchanged. Apoptosis was not affected by the loss of betaglycan, but proliferation within the interstitium was reduced at 14.5 dpc. However, morphometric analysis showed no changes in Leydig cell counts between the wild-type and the knockout testes at 14.5 dpc, indicating that fetal Leydig function, rather than number, was affected by the loss of betaglycan. The expression levels of Sertoli cell markers Dhh, Sox9, and Amh were also reduced in the knockout testis at 14.5 dpc. However, the expression of fetal germ cell markers Pou5f1 and DDX4 were not changed across the genotypes at any age examined. Our data show that the presence of betaglycan is required for normal cord formation, normal fetal Leydig cell development, and the establishment of fetal testis endocrine function, thus implicating TGFB superfamily members as regulators of early fetal testis structure and function.