Postnatal Leydig cell development in rat involves an initial phase of proliferation of progenitor Leydig cells (PLCs) and subsequent differentiation of these cells into immature Leydig cells (ILCs) and adult Leydig cells (ALCs). With an objective to identify the molecular changes associated with Leydig cell differentiation, the mRNA population in PLCs and ILCs were analyzed by the technique of differential display reverse transcription polymerase chain reaction (DD-RT-PCR). Results revealed differential expression of several transcripts in PLCs and ILCs. Of the several differentially expressed transcripts, the expression of transcripts corresponding to collagen IV alpha6 (Col IV alpha6) and ribosomal protein L 41 (RpL41) decreased during the differentiation of PLC to ILC. Also there was an increase in the expression of transcripts encoding enzymes such as microsomal glutathione-S-transferase (mGST 1) and 7-dehydrocholesterol reductase (7-DHCR) during this process. While Col IV alpha6 and RpL41 are known to be involved in cellular proliferation, mGST 1 and 7-DHCR are essential for normal Leydig cell steroidogenesis. A detailed study on 7-DHCR expression in Leydig cells revealed that this enzyme plays a crucial role in steroidogenesis. Interestingly expression of this enzyme is not under acute regulation by Luteinizing hormone (LH).