Fetal exposure of male rats to di (n-butyl) phthalate (DBP) induces testicular changes remarkably similar to testicular dysgenesis syndrome in humans; these include induction of focal areas of dysgenetic tubules in otherwise normal testes. In searching for the fetal origins of the latter, we used image analysis to show that exposure to 500 mg/kg DBP [embryonic day (E)13.5–20.5)] caused abnormal aggregation of Leydig cells centrally in the fetal testis. This aggregation was not due to increase in Leydig cell number, and Leydig cell size was significantly reduced in DBP-exposed animals, as were testosterone levels and immunoexpression of P450 side-chain cleavage enzyme. The Leydig cell aggregates did not exhibit evidence of focal proliferation at E17.5–19.5. Using confocal microscopy and Leydig (3β-hydroxysteroid dehydrogenase) and Sertoli (anti-Mullerian hormone) cell-specific markers, we show that fetal Leydig cell aggregates in DBP-exposed animals trap isolated Sertoli cells within them at E21.5. These areas of intermingled cells are still apparent on postnatal d 4, after cessation of DBP treatment, when they may form misshapen seminiferous cords that trap (intratubular) Leydig cells within them. These centrally located dysgenetic tubules contain germ cells in early puberty, but by adulthood they are Sertoli cell only, implying that presence of intratubular Leydig cells interferes with spermatogenesis. It is concluded that DBP-induced fetal Leydig cell aggregation may be a key event in formation of focal dysgenetic areas in the testis, and identification of the mechanisms underlying these events may give new insights into the fetal origins of testicular dysgenesis syndrome disorders in the human.