To elucidate the mechanism of infertility caused by cryptorchidism we focused on early stage spermatogenesis and spermatogonial stem cell activity in undifferentiated spermatogonia in cryptorchid testes. Histological findings and expression patterns of the stem cell marker undifferentiated embryonic cell transcription factor 1 were examined in a unilateral cryptorchid rat model. We removed unilateral descended testis and contralateral descended testis from cryptorchid and normal rats (control), respectively, 18 days postcoitum to 144 days postpartum. In descended testes gonocyte differentiation into early A spermatogonia occurred at 9 days postpartum. However, this transformation was altered in undescended testes. Furthermore, the undifferentiated embryonic cell transcription factor 1 negative early A spermatogonia-to-positive early A spermatogonia ratio was significantly higher in the undescended testis group (mean ± SD 0.69 ± 0.04) than in the control (0.46 ± 0.10, p = 0.037) and descended testis (0.44 ± 0.05, p = 0.022) groups, indicating decreased early A spermatogonia with spermatogonial stem cell activity in cryptorchid testes. In cryptorchid testes the differentiation from gonocytes into early A spermatogonia and the stem cell activity of early A spermatogonia were altered during the early stage of spermatogenesis, suggesting that the loss of spermatogonial stem cell activity in cryptorchid rats resulted in altered spermatogenesis, thus interfering with fertility.