In fish spermatogenesis, the main action of progestins is generally regarded as the induction of sperm maturation. Our previous in vitro study demonstrated that a progestin, 17, 20-dihydroxy-4-pregnen-3-one (DHP), induced the initiation of meiosis in spermatogenesis in the Japanese eel (Anguilla japonica). In the present study, to elucidate the molecular mechanisms underlying the action of DHP, we attempted to clone cDNAs encoding genes whose expression was induced by DHP in eel testis, using cDNA subtraction. One of the cDNAs we isolated encodes eel 11-hydroxysteroid dehydrogenase short form (e11-HSDsf), and Northern blot and RT-PCR analysis showed that transcripts of e11-HSDsf in testis were induced by DHP. The recombinant e11-HSDsf had 11-dehydrogenase activity, metabolizing cortisol to cortisone, and 11-hydroxytestosterone to 11-ketotestosterone (11-KT). In vitro experiments revealed that eel immature testis had 11-dehydrogenase activity, and DHP treatment enhanced the activity. To understand the role of 11-HSD in spermatogenesis, we examined the direct effects of cortisol on eel spermatogenesis using an organ culture system. Cortisol induced DNA replication in spermatogonia and enhanced the spermatogonial proliferation induced by 11-KT. However, excess cortisol inhibited proliferation. In addition, 11-KT production was induced in testicular fragments incubated with cortisol. These results suggest that optimal levels of cortisol induced spermatogonial mitosis by increasing 11-KT production. Furthermore, two possible roles of DHP on spermatogenesis, via the up-regulation of 11-HSD expression, are suggested: positive feedback control of 11-KT production, and the modulation of cortisol levels to protect testes from excess circulating cortisol.