Mammalian oocytes are arrested at the prophase of meiosis before induction of maturation by the preovulatory luteinizing hormone (LH) surge. LH also promotes the survival of meiotic male germ cells in the testis. Because LH binds somatic cells, the mechanism underlying its regulation of germ cell function is unclear. We found that LH stimulates Leydig insulin-like 3 (INSL3) transcripts in ovarian theca and testicular Leydig cells. INSL3, in turn, binds a G protein-coupled receptor, LGR8 (leucine-rich repeat-containing G protein-coupled receptor 8), expressed in germ cells to activate the inhibitory G protein, thus leading to decreases in cAMP production. Treatment with INSL3 initiates meiotic progression of arrested oocytes in preovulatory follicles in vitro and in vivo and suppresses male germ cell apoptosis in vivo, thus demonstrating the importance of the INSL3-LGR8 paracrine system in mediating gonadotropin actions.