Tuberoinfundibular peptide of 39 residues (TIP39) was identified as a PTH 2 receptor ligand. We report that mice with deletion of Tifp39, the gene encoding TIP39, are sterile. Testes contained Leydig and Sertoli cells and spermatogonia but no spermatids. Labeling chromosome spreads with antibodies to proteins involved in recombination showed that spermatogonia do not complete prophase of meiosis I. Chromosomes were observed at different stages of recombination in single nuclei, a defect not previously described with mutations in genes known to be specifically involved in DNA replication and recombination. TIP39 was previously shown to be expressed in neurons projecting to the hypothalamus and within the testes. LH and FSH were slightly elevated in Tifp39(-/-) mice, suggesting intact hypothalamic function. We found using in situ hybridization that the genes encoding TIP39 and the PTH 2 receptor are expressed in a stage-specific manner within seminiferous tubules. Using immunohistochemistry and quantitative RT-PCR, TIP39 expression is greatest in mature testes, and appears most abundant in postmeiotic spermatids, but TIP39 protein and mRNA can be detected before any cells have completed meiosis. We used mice that express Cre recombinase under control of a spermatid-specific promoter to express selectively a cDNA encoding TIP39 in the testes of Tifp39(-/-) mice. Spermatid production and fertility were rescued, demonstrating that the defect in Tifp39(-/-) mice was due to the loss of TIP39. These results show that TIP39 is essential for germ cell development and suggest that it may act as an autocrine or paracrine agent within the gonads.