DAX-1 [dosage-sensitive sex reversal, adrenal hypoplasia congenita (AHC) critical region on the X chromosome, gene 1] is an orphan nuclear receptor that represses transcription by steroidogenic factor-1 (SF-1), a factor that regulates expression of multiple steroidogenic enzymes and other genes involved in reproduction. Mutations in the human DAX1 gene (also known as AHC) cause the X-linked syndrome AHC, a disorder that is associated with hypogonadotropic hypogonadism also. Characterization of Dax1-deficient male mice revealed primary testicular defects that included Leydig cell hyperplasia (LCH) and progressive degeneration of the germinal epithelium, leading to infertility. In this study, we investigated the effect of Dax1 disruption on the expression profile of various steroidogenic enzyme genes in Leydig cells isolated from Dax1-deficient male mice. Expression of the aromatase (Cyp19) gene, which encodes the enzyme that converts testosterone to estradiol, was increased significantly in the Leydig cells isolated from mutant mice, whereas the expression of other proteins (e.g., StAR and Cyp11a) was not altered. In in vitro transfection studies, DAX-1 repressed the SF-1-mediated transactivation of the Cyp19 promoter but did not inhibit the StAR or Cyp11a promoters. Elevated Cyp19 expression was accompanied by increased intratesticular levels of estradiol. Administration of tamoxifen, a selective estrogen-receptor modulator, restored fertility to the Dax1-deficient male mice and partially corrected LCH, suggesting that estrogen excess contributes to LCH and infertility. Based on these in vivo and in vitro analyses, aromatase seems to be a physiologic target of Dax-1 in Leydig cells, and increased Cyp19 expression may account, in part, for the infertility and LCH in Dax1-deficient mice.