Insulin-like 3 (INSL3) is a small peptide produced by testicular Leydig cells throughout embryonic and postnatal life and by theca and luteal cells of the adult ovary. During fetal life, INSL3 regulates testicular descent in males, whereas in adults, it acts as an antiapoptotic factor for germ cells in males and as a follicle selection and survival factor in females. Despite its considerable roles in the reproductive system, the mechanisms that regulate Insl3 expression remain poorly understood. There is accumulating evidence suggesting that androgens might regulate Insl3 expression in Leydig cells, but transcriptional data are still lacking. We now report that testosterone does increase Insl3 mRNA levels in a Leydig cell line and primary Leydig cells. We also show that testosterone activates the activity of the Insl3 promoter from different species. In addition, the testosterone-stimulating effects on Insl3 mRNA levels and promoter activity require the androgen receptor. We have mapped the testosterone-responsive element to the proximal Insl3 promoter region. This region, however, lacks a consensus androgen response element, suggesting an indirect mechanism of action. Finally we show that mono-(2-ethylhexyl) phthalate, a widely distributed endocrine disruptor with antiandrogenic activity previously shown to inhibit Insl3 expression in vivo, represses Insl3 transcription, at least in part, by antagonizing testosterone/androgen receptor action. All together our data provide important new insights into the regulation of Insl3 transcription in Leydig cells and the mode of action of phthalates.