Cytochrome P450 17alpha-hydroxylase/17,20-lyase (CYP17) is critical in determining cortisol and sex steroid biosynthesis. To investigate how CYP17 functions in vivo, we generated mice with a targeted deletion of CYP17. Although in chimeric mice Leydig cell CYP17 mRNA and intratesticular and circulating testosterone levels were dramatically reduced (80%), the remaining testosterone was sufficient to support spermatogenesis as evidenced by the generation of phenotypical black C57BL/6 mice. However, male chimeras consistently failed to generate heterozygous CYP17 mice and after five matings chimeric mice stopped mating indicating a change in sexual behavior. These results suggested that CYP17 deletion caused a primary phenotype (infertility), probably not due to the anticipated androgen imbalance and a secondary phenotype (change in sexual behavior) due to the androgen imbalance. Surprisingly, CYP17 mRNA was found in mature sperm, and serial analysis of gene expression identified CYP17 mRNA in other testicular germ cells. CYP17 mRNA levels were directly related to percent chimerism. Moreover, more than 50% of the sperm from high-percentage chimeric mice were morphologically abnormal, and half of them failed the swim test. Furthermore, 60% of swimming abnormal sperm was devoid of CYP17. These results suggest that CYP17, in addition to its role in steroidogenesis and androgen formation, is present in germ cells where it is essential for sperm function, and deletion of one allele prevents genetic transmission of mutant and wild-type alleles causing infertility followed by change in sexual behavior due to androgen imbalance.