In the preceding paper it was shown that transient neonatal hypothyroidism induced by treatment of rats from birth to day 25 with the goitrogen 6-propyl-2-thiouracil (PTU) is associated with increases in testis wt and DNA content of up to 80% during adulthood. The testis changes were accompanied by similar, though less marked, increases in the wt and DNA content of epididymis and accessory organs. The purpose of this study was to assess sperm production in these enlarged testes and measure changes in sperm reserves in the epididymis. Testes and epididymides were obtained from control rats or rats given PTU from birth to day 25 (designated "treated") at 90, 135, 160, and 180 days of age. Daily sperm production (DSP), efficiency of sperm production (DSP/g testis), and epididymal sperm reserves were measured in all animals. Compared to controls, DSP of the treated rats was increased by 83%, 86%, 136%, and 132% at 90, 135, 160, and 180 days, respectively. Thus, in the treated rats, DSP, like testis wt, plateaued at day 160. In addition, efficiency of sperm production was increased by 15%-30% at all ages in treated animals. Epididymal sperm reserves were also increased in treated rats at all ages, but the correlation between DSP and epididymal sperm reserves was weak. Sperm motility and concentration in caudal epididymal fluid of adult males treated from birth to day 25 with PTU were normal. These males were fertile and sired litters in which pup wt and pup number were normal. These results indicate that neonatal hypothyroidism in rats is associated not only with increased testis size but also with increased efficiency of sperm production, resulting in increases in DSP of up to 140% in these animals during adulthood. Maximal sperm production is reached at 160 days of age in treated rats (compared to 100 days in controls), coinciding with the attainment of final testicular size. This system represents the first experimental model in which such large increases in sperm production can be produced. The neonatal PTU treatment does not appear to impair fertility or alter sperm characteristics when these animals become adults and may be a useful system with which to study factors which normally regulate sperm production.