The current study was designed to investigate the actions of the testicular paracrine factor P-Mod-S on Sertoli cell function and differentiation. Transferrin production by Sertoli cells was stimulated by P-Mod-S to a greater extent than any individual regulatory agent and in a manner similar to a combination of FSH, insulin, retinol, and testosterone (FIRT). P-Mod-S had an additive response in combination with FIRT. The increase in transferrin production with a combination of P-Mod-S and FIRT is the highest level of stimulation (up to 8-fold) observed. These profound effects of P-Mod-S on Sertoli cell function implied a potential unique mechanism of action for the paracrine factor. FSH and FIRT significantly stimulated cAMP levels with both 60-min and 72-h treatments. In contrast, P-Mod-S had no effect on cAMP levels with a 60-min treatment and only a small increase with a 72-h treatment. Interestingly, P-Mod-S stimulated cGMP levels that remained above basal levels up to 72 h of treatment. FSH had no effect on cGMP levels. P-Mod-S did not affect inositol phosphate hydrolysis with treatments between 15 and 60 min. The actions of P-Mod-S on cGMP levels influenced Sertoli cell function on a molecular level. Northern blot analysis indicated that P-Mod-S and FIRT both stimulated the apparent levels of the 2.6-kilobase transcript of transferrin and the 1.7-kilobase transcript of androgen-binding protein. A solution hybridization procedure was used to quantitate the influence of P-Mod-S on Sertoli cell gene expression. P-Mod-S stimulated steady state levels of both transferrin and androgen-binding protein message approximately 2-fold, similar to the effects of FIRT. Both forms of P-Mod-S had similar biological activities and mechanisms of action. P-Mod-S (A) and P-Mod-S (B) both stimulated cGMP, altered Sertoli cell gene expression, and had profound effects on transferrin production. Although slightly different biochemically, both forms of P-Mod-S appear to be functionally similar. Combined observations indicate that the paracrine factor produced by peritubular cells, P-Mod-S, acts on Sertoli cells in part through a cGMP-mediated response to influence the expression of specific genes which subsequently have profound effects on Sertoli cell function and differentiation.