Insulin-like factor 3 (INSL3) regulates testicular descent during fetal life, and Insl3 gene inactivation results in cryptorchidism. Little is known, however, about whether the plasticizer diethylhexyl phthalate (DEHP), a contaminant found widely in the environment, influences INSL3 expression. In this study, primary cultures of Leydig cells from mouse embryos were treated in vitro with DEHP. We also treated pregnant mice with DEHP from gestation day 12 to postnatal day 3 in order to study the effect of DEHP in vivo. INSL3 mRNA expression levels in primary Leydig cell cultures and in the testes of newborn mice were significantly lower following DEHP treatment. DEHP also caused detrimental morphological changes in both primary cultures of Leydig cells and the testes of newborn mice. These results suggest that the downregulation of INSL3 mRNA by DEHP might cause abnormalities of gubernacular development, which might be one of the mechanisms for development of cryptorchidism.