The proliferation and differentiation of possible Leydig cell precursors in adult rats were studied after destruction of the existing Leydig cells with EDS or after daily treatment with hCG. After 2 days with either treatment, a 12- to 16-fold increase in the number of [3H]thymidine-incorporating interstitial cells was found. In the case of hCG treatment, this was probably due to the high plasma hCG levels. However, after EDS treatment, LH levels start to rise between days 1 and 3, suggesting a paracrine stimulation of the proliferation of interstitial cells. After hCG treatment, a substantial increase in the numbers of Leydig cells was already found at day 2. It was concluded that hCG induced a rapid differentiation, without cell division, of existing precursor cells into recognizable Leydig cells. In rats treated with both EDS and hCG, new Leydig cells were not formed during the first 10 days. This indicates that EDS destroys not only mature Leydig cells but also those Leydig cell precursors that are able to differentiate rapidly into recognizable Leydig cells.