Testis expressed gene 18 (Tex18) is a small gene with one exon of 240 bp, which is specifically expressed in male germ cells. The gene encodes for a protein of 80 amino acids with unknown domain. To investigate the function of (Tex18) gene, we generated mice with targeted disruption of the (Tex18) gene by homologous recombination. Homozygous mutant males on a mixed genetic background (C57BL/6J x 129/Sv) are fertile, while they are subfertile on the 129/Sv background, although mating is normal. We showed that Tex18(-/-) males are subfertile because of abnormal sperm morphology and reduced motility, which is called asthenoteratozoospermia, suggesting that (Tex18) affects sperm characteristics. Maturation of spermatids is unsynchronized and partially impaired in seminiferous tubules of Tex18(-/-) mice. Electron microscopical examination demonstrated abnormal structures of sperm head. In vivo experiments with sperm of Tex18(-/-) 129/Sv mice revealed that the migration of spermatozoa from the uterus into the oviduct is reduced. This result is supported by the observation that sperm motility, as determined by the computer-assisted semen analysis system, is significantly affected, compared to wild-type spermatozoa. Generation of transgenic mice containing Tex18-EGFP fusion construct revealed a high transcriptional activity of (Tex18) during spermiogenesis, a process with morphological changes of haploid germ cells and development to mature spermatozoa. These results indicate that (Tex18) is expressed predominantly during spermatid differentiation and subfertility of the male Tex18(-/-) mice on the 129/Sv background is due to the differentiation arrest, abnormal sperm morphology and reduced sperm motility.