To define the nature of the lesion of the early steroidogenic pathway (prior to pregnenolone formation) in gonadotropin-induced desensitization of rat testicular Leydig cells, we evaluated cholesterol side-chain cleavage activity in isolated mitochondria by measurement of pregnenolone synthesis and [14C]isocaproic acid formation from [26-14C]cholesterol. The enzyme activity was shown to be reduced after in vivo treatment with 10 micrograms hCG when compared to that of mitochondria from control animals only when measured in the presence of limiting NADPH concentrations (100 microM). Sonication of mitochondria from control and hCG-treated rats caused complete loss of cholesterol side-chain cleavage activity. When acetone-powdered adrenal cell mitochondria were employed as the source of the enzyme, the addition of sonicated Leydig cell mitochondria from control and hCG-treated animals caused the same differences as those observed with intact Leydig cell mitochondria in the presence of low concentration of NADPH. The Km value of the adrenal enzyme for NADPH incubated with Leydig cell mitochondria increased from 0.111 mM in control to 0.37 mM after hCG, with no changes in Vmax. Moreover, cholesterol side-chain cleavage activity of adrenal mitochondria assayed in the presence of 100 microM cholesterol was progressively inhibited by increasing amounts of acetone powder from Leydig cell mitochondria of control and hCG-treated rats, with ID50 of 500 and 280 micrograms protein, respectively. The inhibiting factor was not a lipid or steroid but a heat-labile protein, with an approximate Stokes radius of 4.8 nm and an isoelectric point of 5.05 +/- 0.23 SD (n = 8). The inhibitory effect was confined to the Leydig cell mitochondrial membrane, and was not related to changes in oxidative phosphorylation. NADPH was not directly oxidized or immobilized by the mitochondrial factor, and this inhibiting substance was not adsorbed on 2',5' ADP-Sepharose 4B. These results have demonstrated that a heat-labile inhibiting protein factor is present in mitochondria from normal Leydig cells and is markedly activated or increased by hCG treatment. This substance that competitively modulates cholesterol side-chain cleavage activity could contribute to the early steroidogenic lesion, and also serve as an endogenous modulator of steroid hormone biosynthesis.