Steroid hormones regulate essential physiological processes and inadequate levels are associated with various pathological conditions. Consequently, the process of steroid hormone biosynthesis is finely regulated. In the testis, the main steroidogenic cells are the Leydig cells. There are two distinct populations of Leydig cells that arise during development: fetal and adult Leydig cells. Fetal Leydig cells are responsible for masculinizing the male urogenital tract and inducing testis descent. These cells atrophy shortly after birth and do not contribute to the adult Leydig cell population. Adult Leydig cells derive from undifferentiated precursors present after birth and become fully steroidogenic at puberty. The differentiation of both Leydig cell populations is controlled by locally produced paracrine factors and by endocrine hormones. In fully differentially and steroidogenically active Leydig cells, androgen production and hormone-responsiveness involve various signaling pathways and downstream transcription factors. This review article focuses on recent developments regarding the origin and function of Leydig cells, the regulation of their differentiation by signaling molecules, hormones, and structural changes, the signaling pathways, kinases, and transcription factors involved in their differentiation and in mediating LH-responsiveness, as well as the fine-tuning mechanisms that ensure adequate production steroid hormones.