Although testosterone is the principal sex steroid produced by the testis, estrogen is known to be produced by both Leydig and Sertoli cells during different developmental periods. Additionally, evidence is unfolding to suggest that germ cells might also participate in the synthesis of estrogen within the male reproductive tract. We have recently reported that the messenger ribonucleic acid (mRNA) for P450 aromatase (P450arom), the enzyme that converts androgen to estrogen, is synthesized by rat germ cells. Therefore, the present study was conducted to determine which germ cell types synthesize active P450arom and to measure the activity of this enzyme in germ cells throughout spermatogenesis and in maturing sperm during epididymal transit. First, P450arom activity was measured in pachytene spermatocytes, round spermatids, and a mixture of round spermatids, elongating spermatids, and residual bodies using the tritiated water (3H2O) assay. Second, sperm isolated from different regions of the epididymis were assayed for P450arom activity. Sperm isolated from the caput epididymis with attached efferent ductules had the higher P450arom activity, whereas sperm isolated from the corpus and cauda epididymides had lower P450arom activity. The decrease in P450arom activity in cauda sperm was further confirmed by immunocytochemistry. On the basis of these observations, we conclude that rat testicular germ cells from pachytene spermatocytes through elongating spermatids and epididymal sperm contain active P450arom and that sperm lose aromatase activity as they mature during epididymal transit. Therefore, both post-pachytene rat germ cells and epididymal sperm are capable of estrogen synthesis and are an additional, potentially significant, source of estrogen in the male reproductive tract.