The primary goal of this study was to determine the 5'region of the Insl3 gene that specifically targets the expression of human insulin to Leydig cells, and to explore whether the testicular proinsulin is efficiently processed to insulin that is able to rescue the diabetes in different mouse models of diabetes. We show here that the sequence between nucleotides -690 and +4 of mouse Insl3 promoter is sufficient to direct the Leydig cell-specific expression of the human insulin transgene (Insl3-hIns). We also found that the 3'untranslated region (3'UTR) of Insl3 was effective in enhancing transgene expression of the insulin in vivo. Expression analysis revealed that the temporal expression pattern of the hIns transgene in Leydig cells of transgenic testes is roughly the same as that of the endogenous Insl3. Despite the Leydig cells translate human proinsulin and secrete a significant level of free C-peptide into the serum, the Leydig cell-derived insulin is not able to overcome the diabetes in different mouse models of diabetes, suggesting a lack of glucose sensing mechanisms in the Leydig cells. A consequence of overexpression of the human proinsulin in Leydig cells was the decrease of fertility of transgenic males at older ages. Germ cells in transgenic males were able to initiate and complete spermatogenesis. However, there was a progressive and age-dependent degeneration of the germ cells that lead to male infertility with increasing age.