Aminopeptidase N (APN) is a naturally occurring ectopeptidase present in mammalian semen. Previous studies have demonstrated that APN adversely affects male fertility through the alteration of sperm motility. This enzyme constitutes 0.5 to 1% of the seminal plasma proteins, which can be transferred from the prostasomes to sperms by a fusion process. In the present study, we investigated the molecular mechanism of action of APN and its role in regulating sperm functions and male fertility. In this in vitro study, epididymal mouse spermatozoa were incubated in a capacitating media (pH 7) containing 20 ng/mL of recombinant mouse APN for 90 min. Our results demonstrated that the supplementation of recombinant APN in sperm culture medium significantly increased APN activity, and subsequently altered motility, hyperactivated motility, rapid and medium swimming speeds, viability, and the acrosome reaction of mouse spermatozoa. These effects were potentially caused by increased toxicity in the spermatozoa. Further, altered APN activity in sperm culture medium affected early embryonic development. Interestingly, the effect of elevated APN activity in sperm culture medium was independent of protein tyrosine phosphorylation and protein kinase A activity. On the basis of these results, we concluded that APN plays a significant role in the regulation of several sperm functions and early embryonic development. In addition, increased APN activity could potentially lead to several adverse consequences related to male fertility.