Proliferating cells express cyclins, cell cycle regulatory proteins that regulate the activity of cyclin-dependent kinases (CDKs). The actions of CDKs are regulated by specific inhibitors, the CDK inhibitors (CDKIs), which are comprised of the Cip/Kip and INK4 families. Expression of the Cip/Kip CDKI 1B (Cdkn1b, encoding protein CDKN1B, also called p27^kip1) in developing Leydig cells (LCs) has been reported, but the function of CDKN1B in LCs is unclear. The goal of the present study was to determine the effects of CDKN1B on LC proliferation and steroidogenesis by examining these parameters in Cdkn1b knockout (Cdkn1b^−/−) mice. LC proliferation was measured by bromodeoxyuridine incorporation. Testicular testosterone levels, mRNA levels, and enzyme activities of steroidogenic enzymes were compared in Cdkn1b^−/− and Cdkn1b ^/ mice. The labeling index of LCs in Cdkn1b^−/− mice was 1.5% ± 0.2%, almost 7-fold higher than 0.2% ± 0.08% (P < 0.001) in the Cdkn1b ^/ control mice. LC number per testis in Cdkn1b^−/− mice was 2-fold that seen in the Cdkn1b ^/ control mice. However, testicular testosterone levels, mRNA levels of steroidogenic acute regulatory protein (Star), cholesterol side-chain cleavage enzyme (Cyp11a1), and 3beta-hydroxtsteroid dehydrogenase 6 (Hsd3b6), and their respective proteins, were significantly lower in Cdkn1b^−/− mice. We conclude that deficiency of CDKN1B increased LC proliferation, but decreased steroidogenesis. Thus, CDKN1B is an important regulator of LC development and function.