Mammalian spermatids and spermatozoa express functional G protein-coupled receptors. However, bicarbonate-regulated soluble adenylyl cyclase (AC), the major AC present in these cells, is not directly coupled to G proteins. To understand how G protein-coupled receptors signal in spermatozoa, we investigated whether a conventional transmembrane cyclase is present and biologically active in these cells. Here, we provide evidence for expression of type 3 AC (AC3) in male germ cells and describe the effects of disruption of the AC3 gene on fertility and function of mouse spermatozoa. As previously reported in rat, AC3 mRNA is expressed in mouse testes and localized, together with soluble AC mRNA, mainly in postmeiotic germ cells. AC3 protein was detected by immunolocalization in round and elongating spermatids in a region corresponding to the developing acrosome and was retained in the mature spermatozoa of the epididymis. Forskolin caused a small increase in cAMP production in mouse spermatozoa, but this increase could not be detected in the AC3(-/-) mice. Inactivation of the AC3 gene did not have overt effects on spermatogenesis; however, AC3(-/-) males were subfertile with only three litters generated by 11 males over a period of 6 months. When used in in vitro fertilization, spermatozoa from these AC3(-/-) mice produced few embryos, but their fertilizing ability was restored after removal of the zona pellucida. Despite an apparently normal structure, these spermatozoa had decreased motility and showed an increase in spontaneous acrosome reactions. These data support the hypothesis that AC3 is required for normal spermatid or spermatozoa function and male fertility.