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The glucocorticoid-induced leucine zipper (Tsc22d3-2) is a widely expressed dexamethasone-induced transcript that has been proposed to be important in immunity, adipogenesis, and renal sodium handling based on in vitro studies. To address its function in vivo, we have used Cre/loxP technology to generate mice deficient for Tsc22d3-2. Male knockout mice were viable but surprisingly did not show any major deficiencies in immunological processes or inflammatory responses. Tsc22d3-2 knockout mice adapted to a sodium-deprived diet and to water deprivation conditions but developed a subtle deficiency in renal sodium and water handling. Moreover, the affected animals developed a mild metabolic phenotype evident by a reduction in weight from 6 months of age, mild hyperinsulinemia, and resistance to a high-fat diet. Tsc22d3-2-deficient males were infertile and exhibited severe testis dysplasia from postnatal d 10 onward with increases in apoptotic cells within seminiferous tubules, an increased number of Leydig cells, and significantly elevated FSH and testosterone levels. Thus, our analysis of the Tsc22d3-2-deficient mice demonstrated a previously uncharacterized function of glucocorticoid-induced leucine zipper protein in testis development.