Müllerian-inhibiting substance (MIS) is a hormone produced by Sertoli cells of the fetal testes that causes regression of the Müllerian ducts, the precursors to female reproductive tract structures that are present in the bipotential urogenital ridge. MIS is also produced in the adult gonads of both males and females, albeit at much lower levels than those measured during the fetal and perinatal periods. Adult transgenic mice chronically overexpressing MIS exhibit severe gonadal abnormalities and, in males, dramatically reduced levels of testosterone, which might lead to the incomplete virilization observed in some of the males. To understand the roles played by MIS in the adult gonad, we performed Northern analyses to show that the MIS type II receptor is expressed in purified Leydig cells and in two rodent Leydig cell lines, R2C and MA-10. Addition of purified recombinant human MIS to cultures of both R2C and MA-10 cells reduced steroid production. With MA-10 cells, the reduction of testosterone secretion into the medium was reduced to 1/10th of that in the control culture, which provided us with a means to study the molecular mechanisms underlying MIS-mediated suppression of testosterone synthesis. Northern analysis revealed that after stimulation with cAMP, the expression of messenger RNA for P450c17 hydroxylaselyase, the enzyme that catalyzes the conversion of progesterone to androstenedione, was reduced to background levels in the presence of MIS. Addition of cycloheximide, a protein synthesis inhibitor, did not prevent the effect of MIS, indicating a direct effect of MIS signal transduction on the expression of P450c17. Analysis of the transcriptional activity of Cyp17, the gene for murine P450c17, with Cyp17 promoter/luciferase reporter constructs shows that MIS regulates the transcription of Cyp17 in a concentration- and time-dependent manner. From our results, we conclude that MIS might play a physiological role in maintaining testosterone homeostasis. These findings will allow us in the future to use the transcriptional regulation of Cyp17 as a model to uncover the signal transduction pathways of MIS and the molecular mechanisms of its suppression of androgen synthesis.