Testicular Leydig cells are somatic cells of the testis that produce androgens. Two distinct types of Leydig cell exist: foetal Leydig cells (FLCs), which induce masculinisation of foetal tissues, and adult Leydig cells (ALCs), which are important for secondary sex characteristics. However, the lineage relationship between these two cell types is unclear, as is the long-term fate of the FLCs. Yuichi Shima and colleagues now address these questions using a lineage-tracing approach in mouse. The authors previously identified an enhancer upstream of the Nr5a1 nuclear receptor (designated FLE) that drives expression specifically in FLCs (Nr5a1 is also expressed in ALCs). Here, they use transgenic mice that express GFP under the control of this enhancer to show that some differentiated FLCs persist into adult stages, whereas others de-differentiate and can subsequently re-differentiate to ALCs, peritubular myoid cells (PTMCs) or vascular pericytes (VPs). Further, these PTMCs and VPs can also act as potential stem cells for ALCs. The authors also demonstrate that FLC-specific Nr5a1 expression, and the FLE element itself, are both essential for differentiation of FLCs and ALCs. Together, these data clarify the lineage relationships between foetal and adult Leydig cell populations, and give insights into the importance of these cells in testicular development.