The abnormal regulation of the Ke 6 gene has been linked to the development of recessive polycystic kidney disease in the mouse. In this report, we have shown that Ke 6 is a 17beta-hydroxysteroid dehydrogenase and can regulate the concentration of biologically active estrogens and androgens. The Ke 6 enzyme is preferentially an oxidative enzyme and inactivates estradiol, testosterone, and dihydrotestosterone. However, the enzyme has some reductive activity and can synthesize estradiol from estrone. We find that the Ke 6 gene is expressed within the ovaries and testes. The presence of Ke 6 protein within the cumulus cells surrounding the oocyte places it in a strategic location to control the level of steroids to which the egg is exposed. Previously, it had been shown that glucocorticoids can induce renal cysts in the neonatal rodent, only when given at a narrow time window of postnatal kidney development. We propose that the reduction in the level of Ke 6 enzyme, which occurs in the cpk, jck, and pcy mice, may lead to abnormal elevations in local level of sex steroids, which either directly or indirectly via abnormal glucocorticoid metabolism result in recessive renal cystic disease, a developmental disorder of the kidney.