The neonatal period in male development is characterized by an acute rise in serum testosterone, which peaks at 2 to 3 months of age. The purpose of this study is to examine the neonatal human testicular interstitium at 4 months for evidence of Leydig cell maturation, as well as any morphological criteria relating to the fate of Leydig cells during this period, specifically, for signs of cell regression. Leydig cells are described with impressive development of the steroid secreting apparatus, which are consistent with the mature Leydig cells found during early fetal development and in the adult. The outstanding feature of these cells is the "organelle association" of extensive, anastamosing tubules of smooth endoplasmic reticulum (SER), pleomorphic mitochondria with a component of tubular cristae, and abundant microperoxisomes associated with the SER. Well-developed Golgi elements, regionalized RER, and diverse cell inclusions are also characteristics of these cells. Reinke crystals and paracrystalline inclusions are absent. Gap junctions are common in this system and are notable in the asymmetric nature of the adjacent cytoplasmic components. These findings provide a morphologic correlate to the reported neonatal phase of testosterone production in man. Intermediate forms of Leydig cells are described with "organelle associations" including decreased SER with increased lipid droplets, and decreased SER with prominent cytoplasmic filaments and/or dramatic mitochondrial changes supportive of mitochondrial involution. Cells consistent with immature Leydig cells are also present. The rather impressive diversity in cell morphology present during this time frame of 4 months, slightly past the peak in testosterone production, provides evidence of Leydig cell regression and a continuity of the mature neonatal Leydig cells with the immature Leydig cells of childhood (Prince, 1984). There is also some evidence of cell degeneration. Although the developmental history of Leydig cells has been described for years as biphasic, it is time to view Leydig cell development in man as a triphasic event, fetal, neonatal, and pubertal.