Targeted inactivation of the insulin-like hormone 3 (insl3) gene in male mice results in altered gubernacular development, disrupted testis decent, and cryptorchidism. Cryptorchidism is a fairly common human malformation, being displayed in about three males per 100 at birth, but only a small percentage can be linked directly to genetic defects. The phthalate esters (PEs) are high production volume, ubiquitous environmental chemicals, some of which when administered during sexual differentiation, induce male rat reproductive tract malformations including gubernacular agenesis. We hypothesized that phthalate-induced gubernacular lesions likely result from an inhibition of insl3 gene expression. Three phthalates, di-n-ethylhexyl phthalate (DEHP), dibutyl phthalate (DBP) and benzyl butyl phthalate (BBP) were administered orally to the dam on gestation day 14 through 18 (GD14-18) and the fetal testes examined on GD18 for effects on steroid hormone production and insl3 gene expression. Compared to chemicals like vinclozolin, linuron, and prochloraz that act as AR antagonists and/or inhibit fetal Leydig cell testosterone production, only the three phthalates significantly reduced both ex vivo testosterone production and insl3 gene expression when quantified by real-time rtPCR. These results provide the first demonstration of PE-induced alteration of insl3 mRNA in the fetal male rat testis.