Peroxisome proliferators include a diverse group of chemicals, some of which have been demonstrated to be testicular toxicants. However, the mechanism by which peroxisome proliferators, such as phthalates, cause testicular damage is not clear. It is known that retinoic acid receptor alpha (RARalpha) and its retinoic acid ligand, the acid form of vitamin A, are required for spermatogenesis. It has been demonstrated that the absence of RARalpha gene or vitamin A in the animal leads to testis degeneration and sterility. Therefore, any compound that disrupts the action of vitamin A in the testis could potentially be damaging to male fertility. The current investigation examined a novel hypothesis that a mechanism of degeneration by peroxisome proliferators in the testis is due, in part, to disruption of the critical RARalpha signaling pathway. We show that peroxisome proliferators were able to disrupt the retinoic acid-induced nuclear localization of RARalpha and the retinoic acid-stimulated increase in transcriptional activity of a retinoic acid-responsive reporter gene in Sertoli cells. Concomitantly, peroxisome proliferators increased the nuclear localization of PPARalpha and the transcriptional activity of a peroxisome proliferator-responsive reporter gene in these cells. These results indicate that peroxisome proliferators can indeed shift the balance of nuclear localization for RARalpha and PPARalpha, resulting in deactivation of the critical RARalpha transcriptional activity in Sertoli cells.