The site of hormone synthesis in the testis of elasmobranchs has been the subject of much controversy. This is primarily due to the problem of whether Leydig cells are present or absent in the testes of many species of elasmobranchs. In previous studies we have shown that key enzymes associated with the biosynthesis of androgen increase in activity during the spermatogenetic cycle of Squalus acanthias (Canick et al., 1983). To determine the site of this activity we undertook an electron microscope study of Squalus testes to identify cells that possessed the structural correlates of steroid production. This report describes cells present in the interstitial tissue that are morphologically analogous to Leydig cells occurring in the testes of higher vertebrates. Although these cells possessed an agranular reticulum, tubulovesicular mitochondria, and lipid droplets, they were mesenchymal in appearance. We have, therefore, preferred to describe these cells as Leydig-like.