AF5q31 (also called MCEF) was identified by its involvement in chromosomal translocation with the gene MLL (mixed lineage leukemia), which is associated with infant acute lymphoblastic leukemia. Several potential roles have been proposed for AF5q31 and other family genes, but the specific requirements of AF5q31 during development remain unclear. Here, we show that AF5q31 is essential for spermatogenesis. Although most AF5q31-deficient mice died in utero and neonatally with impaired embryonic development and shrunken alveoli, respectively, 13% of AF5q31-deficient mice thrived as wild-type mice did. However, the male mice were sterile with azoospermia. Histological examinations revealed the arrest of germ cell development at the stage of spermiogenesis, and virtually no spermatozoa were seen in the epididymis. AF5q31 was found to be preferentially expressed in Sertoli cells. Furthermore, mutant mice displayed severely impaired expression of protamine 1, protamine 2, and transition protein 2, which are indispensable to compact the haploid genome within the sperm head, and an increase of apoptotic cells in seminiferous tubules. Thus, AF5q31 seems to function as a transcriptional regulator in testicular somatic cells and is essential for male germ cell differentiation and survival. These results may have clinical implications in the understanding of human male infertility.