In mammals, Sry, Sox9, and M33 act as regulators at a chromatin level and promote the maturation of embryonic gonads into testes. Recently, it was shown that transcriptional regulation by DNA methylation plays crucial roles in gene expression during the differentiation and development of various cell types. To determine the involvement of DNA methylation in sex determination of the gonad, we developed and performed organ culture of gonad with the DNA methyltransferase inhibitor 5-azacytidine to induce global DNA methylation status changes. In vitro treatment with 5-azacytidine specifically inhibited testicular cord formation in a dose-dependent manner; however, no appreciable defect was observed in ovarian explants. Inhibition of testicular cord was observed only in gonads from 11.5 days post-coitus embryos. These effects were not observed in 5-azacytidine-treated gonads from 12.0 days post-coitus embryos. To determine the effect of 5-azacytidine on Sertoli and Leydig cell differentiation in the testis, we performed whole mount in situ hybridization analysis. The Leydig and stromal cell marker genes Lhx9, Mfge8, and 3beta-Hsd were normally induced in 5-azaytidine-treated testicular explants. Sertoli cell marker genes, Sox9 and MIS were normally induced, but Col9a3, encoding an extracellular matrix component, was inhibited in 5-azacytidine-treated testicular explants. Thus, our data show that DNA methylation is involved in testicular cord formation and Sertoli cell differentiation, acting directly on the gonad at 11.5 days post-coitus.