Previous studies demonstrated that the polypeptide diazepam binding inhibitor (DBI) and its receptor, the peripheral-type benzodiazepine receptor (PBR), are involved in the regulation of steroid biosynthesis and that one site of PBR action resides in mitochondria. In the present investigation, evidence is presented that a functional form of PBR is also present at the cell surface. First, PBR was immunolocalized in the rat testis using biotin-streptavidin peroxidase immunocytochemistry, and results revealed that PBR was present exclusively in the interstitial Leydig cells. Next, the distribution of PBR in MA-10 Leydig cells was further examined using confocal microscopy. MA-10 cells were either fixed and immunostained or fixed/permeabilized and immunostained for PBR, followed by generation of confocal microscope optical sections, three-dimensional reconstructions of these sections, and then generation of vertical confocal sections of the three-dimensional reconstruction. In the fixed/unpermeabilized cells, PBR immunostaining at the cell surface was clearly evident, whereas in the fixed/permeabilized cells, intracellular PBR distribution was more robust. These results suggest that the plasma membrane fraction of the receptor could mediate the action of extracellular PBR ligands on Leydig cell function. Next, we examined whether DBI, the naturally occurring PBR ligand, is secreted by testicular cells and whether it could activate the cell surface PBR. Immunolocalization of DBI demonstrated that it was present in both Leydig and Sertoli cells. Further, using an immunoblot assay, we demonstrated that DBI is present in rat testicular interstitial fluid. Metabolic labeling of cultured immature rat Sertoli cells and MA-10 mouse tumor Leydig cells, followed by immunoprecipitation of the secreted proteins with an anti-DBI antiserum, demonstrated that both Leydig and Sertoli cells secrete DBI and could serve as a cell source for the interstitial fluid DBI. Then, we partially purified the DBI present in conditioned medium and interstitial fluid by reverse phase chromatography and demonstrated it to be bioactive, based on displacement of a radiolabeled benzodiazepine (Ro5-4864)-specific ligand for PBR; pronase treatment of different preparations eliminated all bioactivity. We then examined the effects of DBI on Leydig cell function. DBI added to MA-10 cells affected DNA synthesis and cell growth in a biphasic manner; at low concentrations (1 nM), DBI was mitogenic, increasing [3H]thymidine incorporation and cell numbers by 30-40%, while at high concentrations (1 microM), DBI inhibited cell growth (30-40%). Similar effects on cell growth were obtained using the benzodiazepine Ro5-4864.