An economical and simplified procedure to derive and propagate fully functional lines of undifferentiated rat spermatogonia in vitro is presented. The procedure is based on the formulation of a new spermatogonial culture medium termed SG medium. The SG medium is composed of a 1:1 mixture of Dulbecco modified Eagle medium:Ham F12 nutrient, 20 ng/ml of GDNF, 25 ng/ml of FGF2, 100 microM 2-mercaptoethanol, 6 mM l-glutamine, and a 1x concentration of B27 Supplement Minus Vitamin A solution. Using SG medium, six individual spermatogonial lines were derived from the testes of six separate Sprague-Dawley rats. After proliferating over a 120-day period in SG medium, stem cells within the spermatogonial cultures effectively regenerated spermatogenesis in testes of busulfan-treated recipient rats, which transmitted the donor cell haplotype to more than 75% of progeny by natural breeding. Subculturing in SG medium did not require protease treatment and was achieved by passaging the loosely bound spermatogonial cultures at 1:3 dilutions onto fresh monolayers of irradiated DR4 mouse fibroblasts every 12 days. Spermatogonial lines derived and propagated using SG medium were characterized as homogeneous populations of ZBTB16(+) DAZL(+) cells endowed with spermatogonial stem cell potential.