Normal epididymal function is regulated by androgens and testicular factors. Our studies have been directed towards identifying testicular factors that regulate the function of the initial segment and the mechanisms by which this is achieved. The initial segment appears to be critical for normal sperm maturation in view of recent gene knock-out studies. Previous and ongoing studies from this and other laboratories have shown that the expression of several genes including proenkephalin, cystatin-related epididymal specific (CRES), 5 alpha-reductase and gamma-glutamyl transpeptidase (GGT) within the initial segment is highly dependent upon the presence of testicular factors. A lumicrine mechanism of regulation of these genes is proposed. The regulation of gamma-glutamyl transpeptidase (GGT) is described as a model enzyme for studying the role and identification of testicular factors. GGT appears to play an important role in the protection of spermatozoa from oxidative stress. Multiple GGT mRNAs (II-IV) are expressed within the epididymis, but GGT mRNA IV is the only form that is highly expressed in the initial segment, especially within zone 1A, and is regulated by testicular factors. Testicular factors control this transcript by regulating both its rate of transcription and its stability. Evidence is presented to suggest that basic fibroblast growth factor (bFGF) is a candidate testicular factor that regulates GGT activity in the epididymis. Basic FGF may regulate gene expression in the epididymis via the ras-raf-MAPK second messenger pathway and by members of the Ets transcription family.