From puberty and throughout adult spermatogenesis, retinoid signalling is essential for germ cell differentiation and male fertility. The initiation of spermatogonial differentiation and germ cell meiosis occurs under the direction of local retinoid signalling in the testis, and corresponds with the final phase of somatic Sertoli cell differentiation at puberty. Here, we consider the cellular and molecular basis of retinoid actions upon Sertoli cell differentiation. Primary rat Sertoli cells were isolated during the pubertal proliferative and quiescent phases at postnatal days 10- and 20- respectively, and cultured with all-trans-retinoic acid. We show that retinoid signalling can potently suppress activin-induced proliferation by antagonising G1 phase progression and entry into the cell cycle. Retinoid signalling was also found to initiate tight junction formation in primary Sertoli cells, consistent with a pro-differentiative role. This study implicates retinoid signalling in the differentiation of both somatic and germ cells in the testis at puberty.