Anti-Mullerian hormone (AMH) is mainly involved in the regression of Mullerian ducts in male fetuses, but it may have other functions linked to gonadal development. The present study examines the effect of AMH on steroidogenesis by Sertoli and Leydig cells in fetal and immature rats during the period where AMH is physiologically produced in the testis. The basal aromatase activity of Sertoli cells in primary culture was strongly stimulated (77-91%) by cAMP. AMH (35 nM) reduced cAMP-stimulated aromatase activity by 49-69% as early as fetal day 16 and until postnatal day 20. This effect was dose dependent and was seen after 48 h in culture. AMH also blocked the Sertoli cell aromatase activity stimulated by FSH, but LH did not stimulate this activity, confirming that the aromatase activity effectively resulted from Sertoli cells and not from contaminating Leydig cells. RT-PCR analysis showed that AMH reduced aromatase activity by decreasing the amount of aromatase messenger RNA. AMH also inhibited the LH-stimulated testosterone production by dispersed fetal Leydig cells in culture in a dose-dependent manner. The inhibitory effect of AMH did not depend on the fetal stage studied (16 or 20 days postconception) and resulted from a drop in the steroidogenic activity of each Leydig cell without affecting the number of 3beta-hydroxysteroid dehydrogenase-positive cells. These data provide the first evidence that AMH, like other members of the transforming growth factor-beta family, has an autocrine/paracrine effect on testicular steroidogenic function during the fetal and prepubertal periods.