The fetal testis is not merely a precursor of the adult organ: it is indeed an endocrine gland whose function is the masculinization of the fetus. It differs physiologically and morphologically from the adult testis. In this paper, the first stages of testicular differentiation in the rat are described, with special emphasis on the ultrastructural aspects. At the stage of 13.5 days after fertilization, the first Sertoli cells differentiate; they are characterized by a voluminous and little electron dense cytoplasm, a well-developed RER formed by vesicles and short cisternae filled with a flocculent material. Progressively, they polarize and adhere to one another by adherens-like junctions and cytoplasmic interdigitations to form the differentiating seminiferous cords. In the basal part of the Sertoli cells, a mat of microfilaments differentiates under the plasmalemma, while cytoplasmic blebs protruding in the extracellular space tend to disappear. A continuous basal lamina delineating the seminiferous cords begins to appear on day 14.5 and becomes widespread on day 15.5. These observations, when compared with other data from the literature, emphasize the fact that the differentiation of the Sertoli cells is the first morphological event during testicular differentiation. A possible role of the Sertoli cells in the subsequent organogenesis of the testis is suggested.