Testicular development from the initially bipotential gonad is a tightly regulated process involving a complex signalling cascade to ensure proper sequential expression of signalling factors and secretion of steroid hormones. Initially, Sertoli cell specification facilitates differentiation of the steroidogenic fetal Leydig cells and establishment of the somatic niche, which is critical in supporting the germ cell population. Impairment of the somatic niche during fetal life may lead to development of male reproductive disorders, including arrest of gonocyte differentiation, which is considered the first step in the testicular cancer pathogenesis. In this review, we will outline the signalling pathways involved in fetal testis development focusing on the Nodal pathway, which has recently been implicated in several aspects of testicular differentiation in both mouse and human studies. Nodal signalling plays important roles in germ cell development, including regulation of pluripotency factor expression, proliferation and survival. Moreover, the Nodal pathway is involved in establishment of the somatic niche, including formation of seminiferous cords, steroidogenesis and Sertoli cell function. In our outline of fetal testis development, important differences between human and mouse models will be highlighted to emphasise that information obtained from mouse studies cannot always be directly translated to humans. Finally, the implications of dysregulated Nodal signalling in development of the testicular cancer precursor, germ cell neoplasia in situ, and testicular dysgenesis will be discussed – none of which arise in rodents, emphasising the importance of human models in the effort to increase our understanding of origin and early development of these disorders.