The establishment and maturation of the testicular Sertoli cell population underpins adult male fertility. These events are influenced by hormones and endocrine factors, including FSH, testosterone and activin. Activin A has developmentally regulated effects on Sertoli cells, enhancing proliferation of immature cells and later promoting postmitotic maturation. These differential responses correlate with altered mothers against decapentaplegic (SMAD)-2/3 signaling: immature cells signal via SMAD3, whereas postmitotic cells use both SMAD2 and SMAD3. This study examined the contribution of SMAD3 to postnatal mouse testis development. We show that SMAD3 production and subcellular localization are highly regulated and, through histological and molecular analyses, identify effects of altered Smad3 dosage on Sertoli and germ cell development. Smad3(+/-) and Smad3(-/-) mice had smaller testes at 7 d postpartum, but this was not sustained into adulthood. Juvenile and adult serum FSH levels were unaffected by genotype. Smad3-null mice displayed delayed Sertoli cell maturation and had reduced expression of androgen receptor (AR), androgen-regulated transcripts, and Smad2, whereas germ cell and Leydig cell development were essentially normal. This contrasted remarkably with advanced Sertoli and germ cell maturation and increased expression of AR and androgen-regulated transcripts in Smad3(+/-) mice. In addition, SMAD3 was down-regulated during testis development and testosterone up-regulated Smad2, but not Smad3, in the TM4 Sertoli cell line. Collectively these data reveal that appropriate SMAD3-mediated signaling drives normal Sertoli cell proliferation, androgen responsiveness, and maturation and influences the pace of the first wave of spermatogenesis, providing new clues to causes of altered pubertal development in boys.