SummaryStem Leydig cells have been demonstrated to differentiate into adult Leydig cells via intermediate stages of progenitor and immature Leydig cells. However, the exact regulatory mechanisms are unclear. We hypothesized that the development of stem or progenitor Leydig cells depends upon locally produced growth factors. Microarray analysis revealed that the expression levels of activin type I receptor (Acvr1) and activin A receptor type II‐like 1 (Acvrl1) were stem > progenitor = immature = adult Leydig cells. This indicates that their ligand activin might play an important role in stem and progenitor Leydig cell proliferation and differentiation. When seminiferous tubules were incubated with 1 or 10 ng/mL activin A for 3 days, it concentration‐dependently increased EdU incorporation into stem Leydig cells by up to 20‐fold. When progenitor Leydig cells were incubated with 1 or 10 ng/mL activin A for 2 days, it concentration‐dependently increased 3H‐thymidine incorporation into progenitor Leydig cells by up to 200%. Real‐time PCR analysis showed that activin A primarily increased Pcna expression but reduced Star, Hsd3b1, and Cyp17a1 expression levels. Activin A also significantly inhibited the basal and luteinizing hormone‐stimulated androgen production. In conclusion, activin A primarily stimulates the proliferation of stem and progenitor Leydig cells, but inhibits the differentiation of stem and progenitor Leydig cells into the Leydig cell lineage in rat testis.