During spermiogenesis, young spermatids undergo complex morphological, biochemical and physiological changes that result in the formation of highly polarized flagellated spermatozoa. Many of the changes that occur during this time are essential for the production of fertile sperm. Spermiogenesis includes modifications of the nucleus and perinuclear organelles (perinuclear theca, manchette), formation of the acrosomic system originating from the Golgi apparatus, assembly of the tail structures, topographical arrangement of the cell surface and cytoplasmic reorganization the final phase of which results in release of spermatozoa into the lumen of seminiferous tubules. A number of genes, including the protamine genes, are transcribed in haploid round spermatids. Furthermore, sequential expression of a few protooncogenes takes place during spermiogenesis. Both nuclear and cytoplasmic proteins are synthesized by spermatids. Numerous findings show clear functional relationships between late spermatids and Sertoli cells. Sertoli cell products may directly affect late spermatid development and metabolism. In turn, late spermatids may regulate Sertoli cell function, presumably via residual bodies. The ability for spermatids to modulate the functional activity of Sertoli cells is demonstrated by recent data on cyclin-protein-2, beta nerve growth factor and cytokines that are involved in gonadal cell-cell interaction.